French booksellers have called it a "catastrophe" that VAT rates will go up to 7% in 2012, adding 30 centimes to the price of a €20 paperback. The French government has said that it will ask parliament to postpone the increase in VAT on books from 5.5% to 7% by two months. This is in line with the first recommendations of Councillor of State Pierre-François Racine, who was asked last month by Culture Minister Frédéric Mitterrand and Budget Minister Valérie Pécresse to devise a plan to “accompany” the book sector in the transition.
The move aims to ensure that the increase does not affect the book industry, particularly independent booksellers, since more than 700,000 volumes are in the distribution pipeline, the culture ministry said in a statement. The French Booksellers Association (Syndicat de la Librairie Française, SLF) and others continue to lobby for maintaining the rate at 5.5%.
France24 reports that French booksellers are continuing to worry that a hike in VAT will drive another nail in the coffin of France’s cherished network of independent retailers. Philippe Leconte, who has been a bookseller for the past 27 years and who runs a shop in Paris, told France24: "Everyone knows books are essential to life. And now the government wants them classified as luxury items. It is a catastrophe. How can the country justify keeping the reduced VAT for entry to amusement parks, and then raise it on books?"
Meanwhile the Register reports that exchequer secretary to the treasury David Gauke responded to questions from Labour MP Tom Blenkinsop in the House of Commons on Monday about the VAT on e-books in the UK. He said: "Under EU law, VAT on electronic books must be charged at the standard rate. Existing agreements with our EU partners do not allow the UK or other member states to introduce a new zero-rate or extend an existing one to relieve e-books from VAT."
However, France's president Nicolas Sarkozy has already said that it will apply a reduced VAT rate on e-books from 1st January as planned, and said he hoped the European Commission would not oppose it. Culture minister Frédéric Mitterrand has said he had the impression from European Digital Agenda Commissioner Neelie Kroes the move should not spark “adverse procedures” by the commission against France. He has already told publishers that the state will pay any fines levied by the EU.