WAN concerned over VAT hike

RIGA - The Latvian-languageDiena daily has reported that the World Association of Newspapers is seriouslyconcerned about the government's decision to increase the value added tax rateon printed media.

The Latvian Press Publishers Association has sent out a number ofinternational bodies, including the WAN and European Commission (EC), a letterinforming about the Latvian authorities' decision to raise VAT on the press to10 percent from 5 percent, Diena said.

"We are deeply worried about this decision, which will leave a seriousimpact on Latvia'sprinted media," a representative of WAN told the daily. The internationalassociation is also concerned that the decision on the VAT hike has been takenwithout consulting representatives of press editions.

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

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

Under the new amendments, the VAT reduced rate of 10 percent will be leviedon 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.