Publishing crisis in Romania: VAT on books raised despite Romania being the least read country in the EU.

The austerity measures imposed by the Romanian government to reduce its excessive budget deficit —the highest in the European Union (EU)—include raising VAT on books from 5% to 11%, a decision considered by experts to be dramatic in a country where people read far less than the European average.

Eurostat data from 2022 shows that only 30% of Romanians read at least one book in the previous year , compared to the EU average of 52%.

"This is probably the darkest year for the publishing market," says Mihai Mitrica, executive director of the Romanian Publishers Association (AER) , referring to the recent bankruptcy of the country's second-largest book distributor.

"The VAT increase is very harsh and will lead to the disappearance of bookstores and publishers . At the mere prospect of this increase, we have seen closures, and unfortunately, we will see more by the end of the year," predicts the executive, who is demanding an elimination of VAT on books instead of an increase.

In his opinion, this would compensate for the state's inaction in other areas, such as education and providing public libraries with sufficient books.

By comparison, VAT rates for books in Europe range from 4% (Spain), 5.5% (France), and 7% (Germany) . Some countries, such as the Czech Republic and Ireland, apply zero VAT.

With the new VAT rate, Romania will be second among European Union (EU) countries starting in August, behind only Denmark, which charges 25%.

Raising VAT to 11% not only does not support bookstores but weakens them even further , points out Ana Niculescu of Carturesti, a network of bookstores with a presence throughout Romania.

"With a publishing market estimated at €200 million , the expected gains from a VAT increase are paltry and questionable. The increase will lead to higher prices, lower sales, and the risk of closure for small publishers," he asserts.

Niculescu recalls that a recent EU study showed that a 1% reduction in VAT leads to a 2.7% increase in the number of books purchased.

Another aspect is the potential impact on Romanian literature. Writer and literary critic Adrian Lesenciuc speaks of a "double negative impact."

"On the one hand, it will reduce purchasing power , leading many to abandon what they consider luxuries or useless. Austerity measures will also lead to a drop in sales and other knock-on effects , such as the closure of bookstores and publishing houses," he says.

In any case, he warns that the greatest impact will be a return to the prevalence of self-funded publications, regardless of their literary value, similar to what happened in the 1990s, after the fall of communism.