Compromise sought on newspaper VAT

TALLINN (BNS) - In a bid to find a compromise with newspaper publishers on value-added-tax, the Estonian Finance Ministry is holding out an option to cut the tax from the present 18 percent to 5 percent for newsstand sales if a similar tax is imposed on papers going to subscribers.

The ministry maintains that a 5 percent VAT must be imposed on newspapers delivered by subscription, Daniel Vaarik, adviser to the Finance Ministry, said.

"It's here that we see a compromise," Vaarik said.

He added that the Finance Ministry certainly wanted to receive information about newspaper readership and subscribers to find out what the state was supposed to support.

The Association of Estonian Newspapers on April 12 circulated a statement which stated the association's continued support to levying a zero-rate VAT on printed media for subscribers.

"At accession talks with the European Union, Estonia must seek to be allowed to continue with a zero VAT rate for printed media for subscribers," the association said.

Presently Estonia is levying a zero-rate VAT on newspapers delivered to subscribers, while to newsstand sales the universal VAT rate is 18 percent.