Taxes take the gloss off domestic printers

Russia's magazine industry has been hit by the economic crisis – but also by tariffs and regulation. Many publishing houses not only buy paper abroad, but even print magazines overseas.

The government has announced a temporary cut in import duties on glossy paper, to help boost the country's print industry

Russian print media, just like newspapers and magazines around the world, are going through a tough time. Advertising dropped over 40 % in 2009 over the previous year, and readers are turning to the Internet. Alexander Strakhov, President, Periodic Press Publishers Guild says current laws hamper Russia’s printing industry.

“Today the situation is absurd. To import a finished magazine, I don’t have to pay any import tax. But if I import paper in order to print the magazine here, I have to pay import tax. So, in the end the final product price is higher. This is how it has been and of course this is not viable.”

The government’s finally recognised that and cut import duty on glossy paper – from 15% to 5%. But it’s only a temporary move, until the end of the year, which Strakhov says is too little time to have a lasting impact.

“If I, for instance, have drawn up my budget for the year, and I know the tariff reduction lasts for 9 months, will I be taking the risk of cancelling orders and placing new ones? What if they cancel the tariff reduction tomorrow?”

Despite these reservations, Victor Shkulev, President, Hachette Filipacchi Shkulev Publishing House welcomes the government’s initiative.

“I think that this is a very good move by the government, especially for our publishing house because, apart from printing ELLE magazine, we also print over 25 other magazines. Today, we are the only publishing house that directly imports glossy paper and delivers it over 40 printing houses as far as Siberia.”

A temporary drop in import duty on glossy paper may tempt some publishers to turn to local printers to simplify their distribution. But that still leaves the question of what will happen once duty goes back up again.