'Reading crisis' prompts Denmark to end 25% tax on books

https://www.rte.ie/news/world/2025/0820/1529397-denmark-book-tax/

by austinallegro • 11 months ago

72 59 11 months ago

Svip3• 11 months ago

The way this article is worded makes it sound like Denmark has a 'book tax'. Denmark has a VAT on goods (and services), which is 25%. But Denmark doesn't have split VAT values, so it's either 25% or nothing; no in-between. So they are just proposing removing the VAT from books. (Some goods and services are already exempt from VAT.)

And if you wonder why Denmark doesn't simply lower their VAT or introduce a split VAT system like in most other countries; the answer is technical inertia (or technical debt, if you will). Most Danish accounting and banking systems are hardcoded to assume 25% (or nothing). So if a politician want immediate change to VAT, removing it from a category of goods/services is their only option.

Edit: I realise I was careless in my wording, when I wrote "hardcoded to assume 25% (or nothing)"; I meant that the systems only assume one rate (or nothing), not that the value of 25% was hardcoded (though it is in a few (lesser) systems I've encountered). I apologise for the confusion.

mlinhares2• 11 months ago

Insane that technical debt and general incompetency in software can produce such unexpected side effects.

tossandthrow3• 11 months ago

Why the general incompetency added on?

Ad the other commenter wrote: The 25% is assumed - this has nothing to do with competence but to what level an assumption is true.

Everybody can point fingers at 25 year old code and call the developers incompetent because surrounding requirements have changed.

hvb2• 11 months ago

That general incompetency you're referring to there can also be worded as

For years they didn't build unneeded complexity. And it sounds like for many more years to come. So they're just efficient. Any developer will have had to make things configurable afterwards, that's fine, just evolution of code.

Hard coding also means that it's less likely to break. No customer (in Denmark) can influence this, so why make it configurable?

Over time this does become a problem when source code is lost/companies go under.

geysersam2• 11 months ago

So if the House introduced a 'fixed' VAT tomorrow, say $1, not proportional to the price of the product, would that not break most software used to compute VATs?

We have to make assumptions. Good software doesn't account for every future possiblity, but it is easy to change when the requirements change.

rsynnott3• 11 months ago

During the financial crisis, Ireland added half a percent to VAT. Wanna guess what happened?

(The funny thing is, the _reduced_ rate had been 13.5% for years, but a non-integer rate for the main rate _still_ caused widespread IT problems...)

uoaei• 11 months ago

What is the primary reason for hard-coding these kinds of things? Gotta imagine CScientists would have debated this during the design phase. I have some hypotheses, are any of these right?

* correctness/verifiability analyses

* security? in compiled tools (prevent malicious re-configuration)

* an assumption of the inertia of law

* general incompetence/naivete

???

bruce5112• 11 months ago

There's absolutely no reason to hard-code the value. That's just bad programming.

However you can't expect programmers to predict all possible future compatibility.

In my country VAT has a current rate. That rate can, and has, changed. But we have one rate. Some goods are exempt, but products have a VAT yes/no field.

Perhaps in the future the system will change. One possible change is that VAT attracts different % for different products. I'm not predicting that, or coding for it now. VAT rules could change to anything- I can't code against that.

Svip3• 11 months ago

The real problem is actually less the exact rate of 25%, but rather that most of the systems only assume one rate. Denmark was the first country to introduce a general VAT in 1967, and whilst the rate has changed (last in 1992 to 25%), the number of rates have not. So lowering the general VAT rate would likely be possible in a 1-3 year time frame (depending on unknown factors), but lowering the general VAT rate would be a significant loss on state finances (thus not interesting to politicians) (and as someone else pointed out, it mostly favours high spenders, which is also politically dicey).

However, introducing a split rate would definitely require a time frame of at least 4 years, and no politician are willing to wait that long for a politician win.

geysersam2• 11 months ago

Now VAT is 12% on Tuesdays. Did you "hard code" that VAT is constant across weekdays? The naivite..

kqr3• 11 months ago

Imagine the complexity of correctly accounting for a VAT when rates vary dependin on product type -- and doing it across an entire national economy! I'm glad they don't support that for as long as they don't have to.

Is it doable? Sure. Does it need resources that could be more fruitfully applied elsewhere? Probably.

kasperni• 11 months ago

the answer is technical inertia (or technical debt, if you will)

One of the issues. There are number of others. For example, VAT is a value-based tax. A VAT cut gives the biggest savings to people who spend the most. Since wealthier people typically spend more, they would save more money in absolute terms. For example, a family with a food budget of 3,000 kr. would save 300 kr., while a family with a food budget of 8,000 kr. would save 800 kr. Politically, some parties might prefer tax breaks that focused on lower-income groups.

Another issue, will the cost savings actually be passed on to the consumer?

kqr3• 11 months ago

Hmm. You say "tax break" but I could argue split VAT results in the opposite: a hike in consumption tax. The base VAT rate can be set higher if the VAT on desirable consumption is lower. I.e. it's not that rich people pay less tax for books -- it's that rich people pay more tax for non-books!

incangold• 11 months ago

VAT can be considered a regressive tax because the poorer I am, the more of my money I spend on goods and services, and the less on savings and investments. As a proportion of income, poor people spend more on VAT than rich people. I think it’s about double, in the UK. So you’re right that cutting VAT helps richer people more in absolute terms. But in terms of of quality of life it helps poorer people more.

[edit] assuming we’re talking about VAT on things that everyone buys. Which is why tax codes often exempt essential items from VAT.

Rnonymous• 11 months ago

I was under the impression that VAT taxes are considered to impact mostly the poor. While in absolute terms the rich are impacted most, in percentage terms VAT is considered a much smaller portion of expenses for the rich than the poor. I quote: "VAT is a regressive tax, putting more burden to the poor than to the rich. Indeed, VAT applies the same rate to everyone regardless of their level of wealth – but the richer you are, the lower the proportion of your revenue goes to consumption."

arghwhat2• 11 months ago

I find this logic extremely flawed. If you save half, you save half. If someone saves a lot more than you as a result, it mains they paid a lot more before, and is still paying a lot more than you now. As fair as it gets. Those that complain are usually imagining a robin-hood esque system where the tax progresses towards 100% as income goes up.

Trying to heavily tax billionaires is one thing, but the issue with them is tax avoidance by virtue of these complicated systems, and a lot of the incremental taxes land on people just plain working their ass off, getting no sleep, high stress and high blood pressure as a result. If someone has more because they worked more, they're entitled to exactly that.

Incremental tax also means that if you have a good year and a bad year you pay way more tax than if you just had two average years. Not to mention that such complicated tax is what enables tax optimization whereby those higher up can end up paying less tax. It's stupid.

arghwhat2• 11 months ago

Note that while you have 25% VAT on things, actual VAT accounting is fully dynamic and banking and accounting systems handle this just fine.

On the incoming side, bills can come from other countries with an entirely arbitrary VAT value, so there the VAT value is recorded from the bill.

On the VAT refund side, arbitrary values are used even for Danish VAT, as companies can get full, fixed fraction or even entirely variable fraction if VAT refunded. For example, a company dinner can only be partially VAT refunded as you had private benefit of food, and VAT refund of an asset like a van is the set by the ratio of intended company vs private usage.

On the outgoing side, most banking and accounting systems would be prepared for other EU countries.

There's definitely going to be something hardcoded somewhere (including over 9000 times in the tax systems themselves), but the point is that VAT is already a dynamic size.

Tangokat• 11 months ago

Worth noting that controlling consumption via extra/less tax on specific products is debated a lot in Denmark. Namely cigarettes have a high added tax (about 2kr/0.3 usd PER cigarette). Increasing the tax and thus the price of cigarettes had a fairly large effect on consumption (0.13-0.82% less cigarettes consumed for every 1% price increase) [1]. Recently it has been debated to remove the VAT from vegetables and fruit to increase consumption of those.

The same logic is used for this book VAT exemption (which is good in my opinion) - I doubt we'll see the same effect though. Young people not reading is a complex problem to solve but books are really expensive to buy, so it's a good place to start.

[1] https://vidensraad.dk/sites/default/files/node/field_report_...

z3t4• 11 months ago

The cheif/over-engineerer will account for variable tax rates in the future, especially if they plan to sell their erp system in other countries.

tossandthrow3• 11 months ago

Not only that, but this person will account for arbitrary VAT schemes and embed a small, but Turing complete, dsl to calculate the vat rate.

MathMonkeyMan• 11 months ago

Problem: 15 year olds don't know how to read. Solution: Make books 25% cheaper.

Sure, it can't hurt, but are those kids or their parents gonna go out and buy books, and then, you know, learn how to read?

I wonder what the numbers are like in the US...

mlinhares2• 11 months ago

Not good and not improving https://www.arts.gov/stories/blog/2024/federal-data-reading-...

Dig1t• 11 months ago

True, but also there is a commonly accepted rule in economics where taxing something disincentivizes consumption of that thing. Usually when you lift taxes on something you will see a rise in consumption on that thing. But it remains to be seen if the 15 year olds in this situation will be the ones to consume more of it.

Svip3• 11 months ago

This article[0], which covers the same but in Danish has more details. It mentions Sweden lowering their book VAT in 2001 to 6%. The takeaway was that more books were sold, but to people who were already buying books. Getting new readers thus requires an additional effort than merely lowering the cost.

[0] https://www.dr.dk/nyheder/politik/regeringen-vil-afskaffe-mo...

blowfish721• 11 months ago

Back then there were only linear tv and no social media. I know in my social circles back then in Sweden it was even trendy to read and lots of discussions between friends and even during family events between the teenagers about books. So yes it was a totally different landscape back then.

logicchains• 11 months ago

Make books 25% cheaper.

Nitpick, but it's actually only making books 20% cheaper; 100/125 = 0.8 (80%).

Frieren• 11 months ago

What is people doing instead of reading? Social media is designed to be extremely addictive. It taps also on teenagers fears of failing to fit in.

I love HN for being a place for discussion. But most social media is a one way trend setting communication. Miss it and you are out of touch with everybody else. And it moves fast.

What people need is time for themselves with their own thoughts. That creates the opportunity to read and do other things. A phone that requires 100% of your attention span does not allow for that. And big tech puts billions on tracking and data gathering to better know what keeps people hooked and dependent.

samdoesnothing• 11 months ago

I cannot believe there are people who expect the government to solve every problem when they can't even stop themselves from causing problems left right and centre. Even a child would make the correct inference that taxing books at 25% would not have a positive impact on reading rates. Boggles the mind really.

phito• 11 months ago

They tax everything at 25%. They just added an exception for books.

dsign2• 11 months ago

They need to legalize the possession of birretudas:

https://w.ouzu.im/lit/birretuda

Seriously though, I think the problem is not so much the particular tax on books (though this measure would help) but the way those taxes are computed.

This is just a dumb idea, but if a company or a person has X amount of money to put into a product that then can be sold in essentially free-to-produce copies at a Y price, and then a consumer spends an amount of time Z consuming it, then there should be a tax computed on those three variables X, Y, Z. The idea being that huge actors with high X can end up having a lot of Z. And Z is citizen time, which is dangerous to let it be captured by the interests of big capital in detriment to the interests of lesser capital and other people. But I guess that sounds too socialist :-( .

quanto• 11 months ago

The latest education report from the Organisation for Economic Co-operation and Development (OECD) raised alarm in Denmark when it found 24% of Danish 15-year-olds cannot understand a simple text, up four percentage points in a decade.

So, in 2015, 20% of 15-yo could not understand a simple text. Isn't that unbelievably high?

yorwba• 11 months ago

In 2015 (or some other year), they calculated the bottom quintile (or maybe quartile) score of students on some reading assessment, declared this to be the lowest level of reading competency, and wrote a helpful explanation that people who score at the lowest level of reading competency struggle with simple texts. But there's no single simple text that you could point to where people below the threshold completely fail to understand it and people above the threshold easily breeze through.

Because reading competency isn't binary like that. Reading competency is binary in that complete illiterates cannot read at all and people who aren't complete illiterates typically can read quite a lot, but there probably aren't enough actual illiterates in Denmark to produce scary-sounding statistics. So instead you get arbitrary thresholds that don't mean what they claim to mean.

demaga• 11 months ago

I couldn't find anything about this 24% figure.

There was a PISA report from 2022 though, that showed 19% of Danish 15-year-olds are below 'Level 2 reading'. But this bar is considerably higher than 'understand a simple text'.

Some 81% of students in Denmark attained Level 2 or higher in reading (OECD average: 74%). At a minimum, these students can identify the main idea in a text of moderate length, find information based on explicit, though sometimes complex criteria, and can reflect on the purpose and form of texts when explicitly directed to do so. The share of 15-year-old students who attained minimum levels of proficiency in reading (Level 2 or higher) varied from 89% in Singapore to 8% in Cambodia.

So yeah, I doubt that claim. Journalism at its best, as always

dsign2• 11 months ago

How does this compare with state-of-the-art LLMs? Does this mean that the bottom 20% of 15 years old in Denmark, which has free education[^1] are only good for playing Call of Duty and taking plumber jobs? What does that mean for the future?

[^1]: At least for citizens.

pingou• 11 months ago

I could imagine a significant portion of the students tested can't be arsed to make the effort of reading carefully, especially since the test result wouldn't even impact them, I'm not sure how they can control for that.

jillesvangurp• 11 months ago

Germany uses 7% VAT on books and a few other things (taxi rides, food). 19% is the regular VAT tariff. But going out for food and drinks is still reasonably affordable here compared to other EU countries (and never mind the UK and US where this is super expensive). I buy a lot of ebooks as well.

I'm definitely a bit price sensitive. For me the sweet spot is around 10 euros. Anything above is kind of a big expense and I'll think twice. But a book priced around 7 euros I'll just buy it even if I'm not 100% sure if I'll like it. I might be reading a lot less if those prices were creeping up. So, I can see how this might help more Danes get more into reading.

Reading books is something that high school erodes as a pleasurable activity (by making you read the wrong stuff). I got back into reading after high school when I was again able to read what I wanted and when I wanted again but not everybody does that. I was actually reading a lot before going to high school.

I expect that the Danish educational system might be hammering the fun out of reading in a similar way. Getting kids to read is easier if you give them the right books. If you've ever seen a small kid completely absorbed in a book you know what I'm talking about. I was like that. Force feeding kids dreary literary works is not necessarily the best way to get people into reading. The main learning that re-enforces in kids is that apparently they don't like reading. It's counter productive.

And of course the elephant in the room here is that Denmark is not a big country and that there are probably only so many Danish authors actually worth reading. A good benchmark would be counting the ones that get translated and have an international audience. The same is true in the Netherlands. Only a handful of authors that publishers consider worth translating. And of course the education system puts a lot of emphasis on a handful of native authors that the rest of the world would never have heard about.

Thiez• 11 months ago

I fully agree with you that forced "literature" lessons suck the fun out of reading. As someone who had to go through it in the Netherlands I've sworn off Dutch authors in response, and haven't read Dutch literature for over 2 decades.

PeterStuer• 11 months ago

Does this mean EU citizens can order books from DK at 0% VAT? (6% in Belgium)

Ekaros3• 11 months ago

Well, to certain threshold by the seller. I think it is something like 10k. So when you go beyond that you are automatically responsible to pay VAT to buyers tax authority.

rsynnott3• 11 months ago

Books are already zero-rated in Ireland and a few other countries. (For a long time, _e-books_ were subject to full VAT in Ireland even though books were zero-rated, but this eventually got fixed.)

In general, sellers are obligated to use the VAT rate of the buyer's country, though there's a lot of messiness around the edges there.

rasz• 11 months ago

Variable/exempt VAT on certain goods often leads to funny exploitation. In Poland we got a ton of media (games, movies, pr0n) sold as magazines/books to get 8% instead of 22% VAT.

Here an example from CD Project (Witcher and Cyberpunk guys) https://gamerweb.pl/gry-z-serii-gamebook-w-sieci-sklepow-bie... Gamebook, a book bundled with "free" game :)

rsynnott3• 11 months ago

This is supposedly why the Playstation 2 came with a BASIC interpreter in Europe; they were attempting to have it classified as a computer (no import duties) rather than a games console (duties, at the time). I _think_ part of the motivation for Linux on the PS3 may have been something similar.

lostmsu• 11 months ago

This is actually brilliant. If worded carefully, we could disincentivize closed gardens by adjusting VAT.

sequin• 11 months ago

In this day and age, text is abundantly accessible at all levels of complexity, and you can generate infinitely more with LLMs. Affordability is not an obstacle to developing reading comprehension, and hasn't been for a long time.

duxup• 11 months ago

The latest education report from the Organisation for Economic Co-operation and Development (OECD) raised alarm in Denmark when it found 24% of Danish 15-year-olds cannot understand a simple text, up four percentage points in a decade

For some reason. I don't think a VAT applied to books has anything to do with this nor will altering it do anything to help.

This is one of those situations where it seems like government reaches for the first tool they think of regardless if it makes any sense.

ninalanyon• 11 months ago

This will make no difference at all to the reading skills of Danish 15 year olds. My three children are older than that and never read books. The do however read a lot of text and are perfectly competent at it. But the text they read is on a computer screen or a mobile and is rarely anything paid for, a lot of it is fan fiction related to a major online game.

The idea that you can convince a teenager who has grown up with the internet at their fingertips to buy books by reducing the price by 20% is laughable. And they won't read books provided at no cost either.

The 24% who cannot read well have simply been failed by the schools they attended and it is there that the politicians must look for the reasons and also the solutions.

'Reading crisis' prompts Denmark to end 25% tax on books

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