Printed from:
2020-08-07 12:20:24

Taking a hit for the government: Damper on the press

By Nathan Greenhalgh. 03.02.2009

The already beleaguered newspaper industry may face harder prospects for survival. Many Lithuanian and Latvian media organizations were already trimming staff before the VAT increase took effect, so some journalists view this as the nail in the coffin for some news outlets.On December 11, newspapers across Latvia protested the increase by putting a tombstone for the press on each of their front pages.

The Latvian Press Publishers Association is predicting company failures and calls the increase "another step to limit the freedom of expression in our country.
"The losses this will create for our members will severely damage the ability of many of these companies to survive the recession in our country. Independent print media are a new sector of the economy and they do not have the financial reserves to survive such a sudden tax increase."
Latvia's newspapers aren't the only ones affected – the entire printing industry will face higher VAT. Dace Pugacha, executive director of the Latvian Publishers' Association, which represents book publishers, said all of Latvia's culture would be threatened by VAT increase on an already marginal industry.
"Such big taxes – it's terrible. Publishers are shocked," she said. "It is very bad for our publishing industry, and also for the Latvian language, Latvian culture, Latvian education, all things for the nation, and they are still trying to talk to the government, to the president, to change this situation."
In Lithuania, Dubauskas wouldn't say explicitly that the VAT increase is designed to punish the press, but he noted that conservatives have had frosty relations with the media in the past.
"Their former leader, Vytautas Landsbergis, is at the moment a member of the European Parliament. When he was an active leader, all the time he was telling bad things to the media. At that time it was only talk, I don't love you, you don't love me, just talk. Maybe this is punishment time," Dubauskas said.
He pointed out that the increase wouldn’t put much money in government coffers compared to the size of the entire anti-crisis plan.
"The government will get 2 to 4 million litas from the media, it's been forecast," he said. "This is not a huge amount of money. The whole plan is 5.3 billion."
Dubauskas added that the government could find 2 to 4 million extra litas in its budget by cutting wasteful spending.
"Many things are overpriced when they’re bought by the government. This is an area where we could save lots of money," he said, noting high-profile examples such as the installation of two toilets in the president's office for 240,000 litas. "Sometimes terms of public purchase look like they’re adjusted especially for one company."
VainienÄ— agreed that the government must do more to avoid overpaying for goods and services.
"Everything is there – inefficiency, corruption, special interests, everything is there," she said.
However, she added that the increased VAT in the media could only be an economic, not a political, decision.
"I don't think they wanted to punish the media. That was not the case," she said.
Dubauskas said the government could also look for money from the IMF instead of the media. In fact, even with its austerity measures Lithuania may end up seeking external assistance as the economic downturn continues and the IMF expresses worries about the country's financial state.