Association launches drive for VAT-free books

Photo: archive of Radio Prague

The Association of Czech booksellers and publishers has launched a new campaign called ‘Books without VAT’ in order to drum up support for the existing 15 percent rate to be slashed. The centre-left government of Bohuslav Sobotka is due to discuss the matter, possibly lowering the VAT on books and some other items to as little as five percent.

Jan Kanzelsberger,  jr.,  photo: archive of Radio Prague
Jan Kanzelsberger, jr. who runs one of the country’s most successful bookstore chains, told me more about why the chain was also taking part in the campaign.

“We decided to be a part of it because we feel that the situation with the current VAT is not sustainable for the future and we support efforts to lower the rate. At this moment the Czech Republic has one of the two highest VAT rates in the world – not just in the EU – and that means that the circumstances for the book market are among the worst. Over several years we saw the VAT hiked from five to 15 percent and books are the wrong choice for such a high value-added tax.”

How hard was the market hit over that period? Did smaller publishers suffer? Was there a drop in the number of books bought?

“The VAT increase affected all sectors of the book industry, beginning with the publishers and ending with the booksellers. Over the last five years we didn’t see the price of books go up much, so the VAT was covered or absorbed by the margins of the book industry. But we have to say that the industry is characterised by thin capitalisation and such a state can’t last forever. This year the price of books began to grow and that will continue unless the VAT is changed. So until now part of the VAT was absorbed by the margins but costs and incomes remain high.

Photo: archive of Radio Prague
“It is also worth noting that much of the reading public view books as a cultural thing and that there is a price they expect to pay: a higher rise in price negatively impact readers, making them reconsider whether to buy in the future or not.”

The coalition government has promised to deal with the situation: do you think Mr Sobotka’s cabinet – when it comes to books – will agree to lower the VAT?

“I am a realist. I suppose that if there has been a promise or some kind of a plan, it should be fulfilled. On the other hand, experience teaches us that politicians don’t always fulfil their promises.”