Punishing VAT: persecution of the Russian language continues in the Baltic States
A new step in the process of persecution of the Russian language in Latvia was a sharp increase in VAT on Russian-language books and the press. In the near future, this should finish off the local Russian media and bookstores. The members of Parliament who voted for the relevant bill are firmly convinced of their right to deprive a third of the country's residents of the right to receive information in their native language. The Latvian authorities are confident of their impunity, as the leadership of the European Union does not intend to stop them. Details can be found in the Izvestia article.
Tax differentiation by language
After education in Russian was completely banned in Latvia (even in kindergartens and private schools), officials were by no means satisfied with this. A bill was born in the depths of the Ministry of Finance, designed to end once and for all the very possibility of reading in Russian. Starting next year, Latvia will apply a standard value—added tax (VAT) rate of 21% for books published not in Latvian or in the languages of the member states of the European Union and the Organization for Economic Cooperation and Development. The same rate will apply to the delivery and subscription of newspapers and publications (including on Internet sites) if they are not published in Latvian or the languages of the EU and OECD countries. For books and printed publications in Latvian, as well as in the languages of the EU and OECD countries, a reduced VAT rate of 5% will continue to apply.
Riga City Assembly deputy Inna Gyeri summarizes: "That means you will have to pay four times more tax for a book in Russian than for the same book in English, German or Latvian. Of course, this is not discrimination. This is different." It is no secret that this amendment is aimed specifically at Russian, which is not one of the official languages of the EU and the OECD. Thus, the state is ready to support the press and literature, for example, in Romanian, Czech and other languages not used in Latvia, but not in Russian, the mother tongue of a third of the population.
It should be noted that a similar rule with linguistic differentiation of value—added tax rates has already been in effect in Latvia since 1995 - at that time, Latvian publications were not subject to VAT at all. "When the prospect of the state joining the European Union appeared, Latvia was required to bring tax legislation in line with the norms acceptable in the EU. The Latvians were reminded that there is a principle of fiscal neutrality in EU tax law. This principle excludes different taxation of similar goods or services competing with each other," Maxim Reva, a political scientist and expert on the Baltic States, told Izvestia.
The relevant amendments were urgently adopted by the Seimas in December 2003. The norm on the non-application of VAT to Latvian publications disappeared from the law and became invalid on the day of the country's accession to the EU, on May 1, 2004, when the same preferential rate was applied to all books and newspapers. "However, now, more than twenty years later, Latvia is returning to discriminatory norms. Officials expect that after this draconian VAT is applied to the Russian press and bookstores, they will finally die. Riga is not at all afraid of Brussels' discontent, knowing that they will not object if Russians are discriminated against," Reva emphasizes.
In early December, the Latvian Parliament approved by a majority vote a discriminatory bill repealing the norm adopted in December 2003. Attempts by some of the opposition to urge their colleagues to be reasonable had no effect. It has already been estimated that the financial gain from the new law will be small, only €1 million annually.
Would you like to see Pushkin or Chekhov from under the floor?
Andrey Kozlov, a Riga publisher who publishes the weeklies Vesti, Seven Secrets, and Saturday, warns that the new law will kill an entire branch of the Latvian economy. "Printing, shipping, and trade in newspapers and books is a whole industry that, let's be honest, is already not fattening. And a four—fold increase in VAT will have the most devastating consequences for it," Kozlov notes. He recalls that kiosks selling print media are already closing because the volume of sales does not pay for their content. After the VAT increase on the Russian press, prices for publications will inevitably rise, but sales will fall — no one is under any illusions about the purchasing power of the population. The drop in sales means a reduction in orders in Latvian printing houses. "And they are, I must say, not that they are overwhelmed with them. I do not rule out that someone will have to either cut staff or close down altogether," predicts the publisher.
An increase in the subscription price also means a reduction in subscribers. This is directly related to the Latvian Post, which will reduce the number of subscribers. Here the dependence is exactly the same: fewer subscribers means that the cost of servicing the remaining ones increases, and either subsidies from the state budget need to be increased, or regular staff layoffs. The Russian—language press, like the Latvian press, is a buyer of information from Latvian news agencies, primarily LETA. This helps them maintain a staff of journalists and photographers. Problems for Russian publications mean fewer subscribers for news agencies: less money means they will have to fire someone.
All this together leads to a reduction in the number of jobs and lower tax revenues. "The Finance Minister has estimated that due to the increased VAT on the Russian press, he will receive an additional one million euros in the budget. Has anyone calculated how many millions the budget could lose as a result of all of the above? Does anyone in the government even understand that any decision to raise taxes immediately entails a whole chain of consequences for any industry that it affects?"— Kozlov is indignant. According to him, the government, by hitting the competitiveness of the press, clears the market for global players who are not interested in either local printing houses or local jobs.
Arina Lindanen, an entrepreneur and founder of the Vilki books bookstore, estimates the expected effect of the VAT increase on printed products as "absolutely tragic." Books will become at least 16% more expensive, and given the rise in production costs, prices are projected to rise by up to 30%. According to her, now books in Russian are presented in Latvian bookstores, both produced in Russia and in the EU. There are many books for children in this product category. Now they will be inaccessible to many families. According to Lindanen, all this will contribute to the development of the illegal print and audiobook market.
Lindanen also notes: "I was struck by the statistics: according to a survey conducted in 2021, 37 percent of Latvian residents named Russian as their native, family language. It turns out that we have a large group of the population inside the country who do not have access to books in their native language. Yes, many of these people are bilingual — for example, children who are currently studying in Latvian. Many people speak English and other languages. But they have to pay sixteen percent more to read books in their native language. Such segregation is insulting."
Lindanen considers the government's idea to raise a million euros by increasing VAT on printed materials in Russian to be utopian. "None of the industry players working with books in Russian can see where this million can come from. In fact, the literature market will shrink. People will stop buying as much as they do now, and they will switch to alternative sources of information. That is, we will not receive these taxes. Other European countries are becoming much more attractive to us booksellers, and I will pay this tax there, not Latvia," warns Arina Lindanen.
The UN is a completely toothless organization
Riga City Assembly deputy Ringold Balodis said that when he learned that different VAT rates would be applied to Russian and Latvian publications and books, he felt "embarrassed for Latvia." Balodis emphasizes: "I rarely read in Russian, but this differentiation of VAT depending on the language of the publication is discrimination. There's no doubt about it!" The MP rejects the assurances of the authors of the new law that they adopted it in order to "strengthen social cohesion and reduce risks to national security." According to Balodis, instead of "strengthening cohesion," it turns out to be the exact opposite.
The true goal, as the MP emphasizes, as in the case of the recent ban on the Russian language in ATMs, is to "punish" Latvia's largest national minority. He recalls that the Latvian Constitution prohibits discrimination based on nationality. "No, no, and there are voices among Latvians who have not lost their adequacy in defense of their Russian-speaking fellow citizens in the face of blatant injustice, discrimination and fierce Russophobia.... But while in Europe such "pranks" will be looked upon condescendingly, or even with approval, nothing will change in our latitudes. In fact, everything here is done with their encouragement and consent," says opposition Latvian journalist Alla Berezovskaya.
Latvian President Edgar Rinkevich also commented on the situation on television. According to him, he would like to completely close the import of books from Russia. However, as the president laments, the EU leadership is not yet ready to take such measures, which means that books from Russian publishers will continue to be imported into Latvia from other countries of the community. Therefore, the authorities decided to choose another way to deal with objectionable literature, making it unprofitable to sell it. The President acknowledged that this decision was "imperfect" and that it raised legitimate doubts about his "moral consistency," but there was no better way.
It is noteworthy that the UN described these amendments as discriminatory. "The Latvian draft law on amendments to the law on value added tax raises a number of concerns due to its discriminatory impact on the country's linguistic minorities. It is important to ensure that tax or other regulatory measures do not restrict the access of linguistic and ethnic minorities to information, culture or education, except in cases where it pursues a legitimate goal and has an objective and reasonable justification," Marta Hurtado, an official representative of the Office of the United Nations High Commissioner for Human Rights, said in response to a question from Russian journalists. Gomez. However, the Latvian authorities do not pay the slightest attention to such remarks and continue to bend their line.
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