The Bookseller.com

2nd December 2008

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Audiobook publishers welcome VAT cut

10.07.08 John Ryan

British audiobook publishers have welcomed a proposed European Union directive to reduce the rate of VAT charged on audiobooks, saying it could breath new life into the sector by bringing down prices.

Ali Muirden, publisher at Macmillan Digital Audio and chair of the Audiobook Publishing Association, said: "We started a campaign [to zero-rate audiobooks for VAT] when I was the chair for the first time in 2003. With what's happened in Sweden it does make it easier for the rest of us to make a case." Muirden said the UK audiobook market was worth around £72m in 2007, giving it a 4% share of the total book market.

Nicolas Soames, publisher at Naxos AudioBooks, said audiobook tax reform was vital: "It will be a massive fillip for audiobooks on two scores. Firstly, it will bring audiobooks into line with books, and that will make life easier for booksellers because they won't have to juggle VAT rates. Secondly, it will also be really helpful because price is one of the major reasons for resistance to audiobooks."

Jan Paterson, publishing director of BBC Audiobooks, added: "This is brilliant news. We've long campaigned for this. Anything that can be done to lower the price of audiobooks is a terrific step in the right direction."

Currently 25 of the EU's 27 member states tax printed books at zero or reduced VAT rates with the objective of encouraging reading, but audiobooks are excluded from this. The proposal, which has until 2011 to be ratified, suggests bringing audiobooks in line with books, with details of the level of VAT reduction to be hammered out between the 27 countries.

The move to bring audiobooks into the reduced tariff fold marks a recognition of the increasing importance of the category. Sweden raised the stakes earlier this year by defying the EU and lowering VAT on audiobooks illegally to 6% from 25%, in a shift that was seen by many as speeding up the requirement for reform of the EU-wide tax regime on the category. Currently, audiobooks account for close to 10% of the total book market in Sweden, making it Europe's most developed arena for the category.

A Federation of European Publishers spokeswoman said that the proposal has until 31st December 2010 to be ratified, but that the commission would not be pursuing Sweden.

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