WAN concerned over VAT hike

RIGA - The Latvian-language Diena daily has reported that the World Association of Newspapers is seriously concerned about the government's decision to increase the value added tax rate on printed media.

The Latvian Press Publishers Association has sent out a number of international bodies, including the WAN and European Commission (EC), a letter informing about the Latvian authorities' decision to raise VAT on the press to 10 percent from 5 percent, Diena said.

"We are deeply worried about this decision, which will leave a serious impact on Latvia's printed media," a representative of WAN told the daily. The international association is also concerned that the decision on the VAT hike has been taken without consulting representatives of press editions.

EU communications and media commissioner Viviane Reding is also assessing the letter of Latvian press publishers, her representative said. The EC, however, abstains from giving further comments for the time being. The press publishers say in the letter that the decision to raise the VAT was unexpected and is likely to cause serious problems for printed media. There are also concerns that the measure might be an attempt to restrict press freedom.

The decision to raise VAT has been taken as part of Latvia's economic stabilization and recovery program that parliament passed on Dec. 5 along with the amended 2009 government budget. The plan provides for a number of measures aimed at improving the economic situation.

Under the new amendments, the VAT reduced rate of 10 percent will be levied on the press in 2009, but the tax will be increased to 21 percent from 2010.

At present, the VAT rate on the press is 5 percent.