Copenhagen booksellers expect a boost in the book market through VAT cut
Shop owners and experts believe that the proposed removal of the value-added tax (VAT) on books will have positive effects on the Danish book market and reading culture.
Recently the Danish culture minister Jakob Engel-Schmidt announced that the government is going to propose a removal of the VAT on books in the budget plan for 2026. The current VAT on books in Denmark is 25% and is the highest in the world according to the International Publishers Association. Removing it is going to cost the Danish government approximately 330 million Danish kroner. According to Engel-Schmidt this measure is necessary in order “to end the reading crisis that has unfortunately been spreading in recent years,” as he told the Ritzau news agency.
With the term “reading crisis” he is referring to the declining numbers of literacy among young Danish people. According to the 2022 PISA study, the literacy score of 15-years-old Danish students is on an all-time low since the first study was made in 2000. The recent results show that a quarter of Danish 15-year-olds cannot understand a simple text.
By removing the VAT on books, the government wants to make books more accessible and get more people to read again. Associate Professor of Business History at the Copenhagen Business School Alfred Reckendress confirms that the books in the bookstore should actually be cheaper for the consumer if the VAT really gets removed.
“It should be cheaper for consumers to buy goods, since taxes are usually assumed to be passed on to them at least partly – and when such taxes are removed, prices should therefore go down.” He thinks that this could enhance the number of people that have the financial means to buy books.
Booksellers support the government's proposal
Copenhagen bookshops have reacted positively to the government’s plan. Merete Reinholdt from the bookstore Thiemers Magasin I Kvindernes Bygning thinks it is a good idea to drop the VAT. “It is important that people read, and books are so expensive in Denmark so you have to do something to push people to buy and read more.”
At Thiemers Magasin they have already experienced that the VAT removal could lead to more sales. As a celebration of the proposal, they gave a 20% discount on every book in their shops on the day the minister of culture announced it. “We were selling so well. I said it is the best day ever since we started in March and the people from our other store said it was like Christmas time”, Merete Reinholdt says.
We expect that sales would be higher than they are right now.
Anna Johansen, Bookshop owner
The owners of the BRØG Litteraturbar, Anna Johansen and Claes Benthien also support the idea of the government. “We expect that sales would be higher than they are right now” says Anna Johansen. Claes Benthien agrees: “They have done the same in Sweden. They did not remove the VAT but lowered it. And the effect was immediate: people bought more. Why should it be different in Denmark?”
In Sweden the VAT on books also was 25% until 2002, when it was lowered to 6%. According to a report by the Swedish Booksellers Association and the Swedish Publishers’ Association from 2004 lowering the VAT indeed led to a rise in book sales in the following years.
Possible boost for the Danish book production
But removing the VAT in Denmark could also have a different effect on the book industry, according to Alfred Reckendress. ”It could allow publishers to publish a broader range of books again”, explains Alfred Reckendress. “What we have seen is that the number of productions and new publications in Denmark has reduced fundamentally.” Data by StatBank Denmark confirms that the production of books in Denmark has declined in recent years.
Alfred Reckendress states rising production costs as a reason for this decline. “So the book production has become more expensive in the last 10 years, and the publishers found a solution in reducing the numbers of newly published books that appear to be a little bit more risky.” So removing the VAT could also lower production costs, which could lead to rising production numbers again.
A way of preserving Danish culture
Claes Benthien also sees this as another important possible effect on the book industry. “If a book is too expensive, people do not buy it and publishers probably will not publish it.” With the removal of the VAT and lower book production costs, he thinks that publishers will also produce a wider range of books again. “That is also, as the minister had said himself, a way of preserving Danish culture. So it is a way indirectly to preserve the written word in Denmark which is important”, Claes Benthien says.
We also spoke to people from Copenhagen about their reading habits and what they think about the proposal:
