By Eugene Gerden
The Ukrainian government is considering abolishing the existing tax benefits and other incentives to the domestic book publishing industry, with the aim to raise additional funds for the state budget.
If the measures are approved, Ukrainian publishers are likely to lose favorable VAT and income tax benefits. In addition, the government may scale back its earlier plans to provide support for the opening of new bookstores in the country; currently the number of bookstores is estimated at 600, serving a population of some 46 million people. Finally, the government may no longer provide subsidies to pay for the interest on bank loans taken by Ukrainian publishers.
It is also uncertain whether the government will meet its commitment to provide some US$20 million for the promotion of books and reading in the country, as part of a state program approved by the previous Ukrainian government.
In the meantime, several leading Ukrainian book publishers have already raised criticisms. According to Viktor Kruglov, editorial director of Ranok, one of Ukraine’s top publishing houses, said “We do not believe that the Ukrainian state budget will receive huge profits from doing this. The volume book publishing in Ukraine (both in Ukrainian and Russian languages) is so small that it would be insignificant for the state budget. However, the consequences for such a decision will be catastrophic for the whole country.”
He has also noted that the abolishment of any benefits may result in an increase in prices for Ukrainian books, perhaps by as much as double.
According to Kruglov, as much as 80% of the domestic book market — estimated at some 47 million units per year — is taken up by Russian-language books. However, in light of the ongoing tension between Russia and the Ukraine, this may soon change.
Prior to change in government, the Ukrainian Parliament had considered the introduction of customs duties on the imports of book to the country and simultaneous abolishment of duties on the exports of Ukrainian books to abroad. The was initially made by Oleg Tyagnibok, a leader of “Svoboda” party and one of the leaders of Ukraine’s recent revolution.