While Eesti Päevaleht (EPL) and other major publications will be able to manage the planned press publication VAT rate hike somehow, the question is rather what will become of smaller editorial teams, Delfi and EPL editor-in-chief Urmo Soonvald said in appearance on Vikerraadio's "Uudis+" on Monday.
According to Soonvald, the Estonian government's decision to increase the VAT rate on press publications from its current 5 to 9 percent is an unprecedented step not just in the surrounding region, but Europe as well.
"Estonia and the Estonian government opted to behave differently than the other 19 European countries where VAT on the press is 5 percent or below that," he said. "They found that this 9 percent is reasonable to take from media publications' and consumers' pockets."
The editor-in-chief added that the biggest complaint against the Ministry of Finance, the Finance Committee of the Riigikogu, the Government Office but also the Office of the Prime Minister is that prior to making the change, no one came to speak with media publications or seek an analysis from them.
"The results of an analysis would have clearly indicated how price sensitive that entire group of people in Estonia is who subscribe to our print paper or digital packages," he explained. "We and likely also Postimees, Äripäev and Õhtuleht have experimented with various price points for digital as well as print publication subscriptions, and we can see that those single percentages have a huge impact on subscribers. And unfortunately, when that price goes up, that impact in terms of subscriptions is negative."
He added that it's too early to assess just how much subscription prices may go up. The exact price point in absolute numbers will presumably become clear in 2025.
Print publications at risk
According to Soonvald, several print publications in Estonia are at risk due to the planned VAT hike.
"It certainly won't have a good impact on EPL, but we'll get by thanks to the fact that we have the major [online portal] Delfi," he acknowledged. "What will become of little editorial teams — those that don't fit under Delfi or Postimees — that is the question."
He added that the time will finally come where there will be no point keeping paper publications in print by force anymore, as home deliveries and printing costs are getting irrationally high.
"At some point it will be wiser to end the publishing of print publications a day sooner than to try to maintain them through a victorious end," he said.
The editor-in-chief concluded by expressing hope that MPs in the Riigikogu would vote according to their consciences, not party lines.
"It would be a miracle if politicians — first and foremost Kaja Kallas, Mart Võrklaev, Erkki Keldo, Annely Akkermann — managed to change their minds," Soonvald said. "They should understand that a person's strength is demonstrated by whether they are capable of reassessing their decision during the process as well, when new facts have emerged, or whether final victory for them is to hold onto their position that is ultimately detrimental to society."
The Estonian government on Monday approved four bills of tax amendments that will see the VAT rate on press publications increase from the current 5 to 9 percent in 2025. The VAT rate for accommodation, meanwhile, will increase in 2025 from the current 9 to 13 percent, which is a lower increase than initially proposed.
Editor: Aili Vahtla