The VAT on books reduced in Slovakia: What effect will this have?

In January, the government of Slovakia reduced VAT on books from 10% to 5%, providing support for publishers and book distributors suffering in the midst of growing economic pressure.

In Slovakia, the prices of printed publications have increased only slightly compared to the rate of inflation over the past decade. Publishers and book distributors note that they have been absorbing part of the rising costs themselves so that books could remain affordable for as wide an audience as possible.

“Unlike most other goods, book prices haven’t seen major increases, so this gives us a chance to catch our breath,” Juraj Heger, president of the Association of Slovak Publishers and Booksellers said.

“This will help to hinder the rise in prices. We shouldn’t forget that we still face other costs that continue to grow rapidly – distribution, printing, rent, and electricity among them,” said Monika Žákovská, Head of Marketing at Panta Rhei, one of Slovakia’s best-known publishing houses.

“We’ve been running bookstores at a loss, with rising costs for upkeep and electricity. Higher wages and rent, which are linked to inflation, are just a few of the many issues that have made things difficult recently. Bookstores also suffered greatly during the pandemic,” Heger said.

In addition, publishers and book distributors highlight another significant factor that affects book prices — inflation — which continues to put pressure on production costs.

“That means there will not be any price drop for books. The average price of a paperback is about €15.60, and it has remained at that level so far,” Žákovská said.

According to economist Viliam Pálenik, Institute of Economic Research of the Slovak Academy of Sciences, the problem is not short-term. The market situation is not expected to improve in the coming years.

Additionally, the Slovak book market faces new financial challenges and consolidation measures. These include the introduction of a sales tax, an increase in the minimum wage, and a predicted rise in inflation.

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Copy editing: Ben Angel