Retention of the special 9 per cent rate of VAT on newspapers has been welcomed by the National Newspapers of Ireland (NNI).

The umbrella organisation representing a range of Irish newspapers said the decision to hold to the reduced VAT rate was in line with best practice throughout many European states and recognised the public service role carried out by Irish newspapers.

The organisation said newspapers were also a key driver for the digital economy.

“Ireland is one of 21 European countries that apply a reduced rate (0 to 10 per cent) of VAT to newspapers in recognition of their unique role in the democratic process,” the NNI said in a statement.

“Newspapers, as primary generators of news, provide a valuable public service role. The industry currently employs several thousand people and is investing in the development of a successful and sustainable digital press market which will drive jobs and growth in the digital economy.”

The NNI said it has invested large sums in education at secondary level through NNI Press Pass, an initiative devised to address concerns raised about declining literacy levels in Ireland.

“In maintaining the 9 per cent rate of VAT, NNI is delighted that the Government has confirmed its support for the valuable contribution made by the Irish newspaper industry,” it said.

The organisation had lobbied for retention of the 9 per cent rate, claiming that publishers remain committed to on-going investment and to sustaining the industry for the next generation of news consumers.

A decision to revert to the higher VAT in the face of challenges faced by both newspaper producers and readers would have proved “catastrophic”, the NNI added.