TIRANA, Jan. 22- After shocking news from the Albanian State Institute of Statistics, INSTAT, that throughout 2017 one million Albanians haven’t had read at least one book, various theories were claimed by critics as to why this happened. During the 21st edition of the book fair held on Nov. 14-18, 2018, there was even an activity organized regarding the challenges of reading.
One of the reasons that Albanians aren’t reading anymore is due to the high prices of the books, which comes from the taxes imposed on books and publishing houses. This was also one of the complaint points that publishers stressed on. There was even a request by the Publishers’ Association for the government to lower the taxes, which would help the book and positively impact readership.
Then leader of Economic Commision, Erion Brace (now in the position of deputy prime minister), and SP deputy Milva Ekonomi agreed to helping the publishing house businesses. The Association sent a letter where they asked of foreseeing the possibility of changing the tax system for books.
The initial request from the publishers was a tax reduction of six percent for the supplying of books to bookstores. The original taxation amount that the publishing houses had to pay to the government was 20 percent for each book printed and supplied. However, something was lost in translation, as the government didn’t reduce the requested six percent taxation.
Instead, the 20 percent tax that the publishing houses had to pay the government on each bookstore supply remained, and it imposed a new law which binds the bookstores to pay 6 percent on each sale. However, they won’t have to pay the government any taxes for the books they buy to sell.
The Ministry of Finances has not issued the guidelines for book taxation yet, so the publishers are not sure about the real numbers they will have to owe the government. The most surprising thing is that this whole situation was intricated from the government’s desire to help the book and its distribution. Erion Brace and Milva Ekonomi sent a proposed bill to the parliament for review, but it seems that the initial government bill was the one that passed instead.
The crushing weight of the books cost is due to other services not imposed on the taxing, like the commision of the librarian which amounts from 25 to 30 percent. There is also a cost for translation or copyright, editing, which all amount to 30 up to 40 percent of a book’s cost, and finally there is the printing cost which amounts to 20 up to 30 percent. Thus, even though the publishers will receive a lower taxation on book production, they will still have to pay a VAT on sale.
In the entire cost of the book, if the printing with VAT is as 20 percent of the sale price, the reduced VAT equals four percent of the final sale price and the placing of the six percent sale VAT, implies a net increase of the fiscal burden by two percent on the book sales. In case that the cost of book supplies have a VAT amounting to 30 percent of the sale price, then the VAT imposed on the book will equal the reducing VAT. Only in rare case when the printing and other supplying costs with VAT are higher than 30 percent, will the publishers receive a small reduction on the fiscal burden.
The increase or reduction of the fiscal burden depending on the book is one of the many issues that the new system is expected to create. The administrative burden for the correct bookkeeping to sales and supplies, and of liability accounts of VAT in sales and supplies, are a new nuisance that librarians and publishers have to face in the generally poor market they operate at.
Issues from the new law will also face readers that buy and order books online. If until now Albanian buyers hadn’t paid any VAT for the imported books, since now they will have to pay a six percent tax for each book package costing over 22 euros. So in this case there are both fiscal and administrative burdens added. The untaxed ordered books can be taken from the post office in the reader’s area, however the taxes ones can only be received at the post office of the Kinostudio area in Tirana.
