'reading Crisis' Prompts Denmark to End 25% Tax on Books
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Denmark is removing its 25% VAT on books to address a 'reading crisis' among 15-year-olds, sparking discussion on the effectiveness of this measure and the underlying causes of declining reading skills.
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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.
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.
You can not transfer categorical statements like you do.
The code missing is that for per-product type variation in VAT rate, which sounds complicated enough that Iawould expect a good engineer to shrug and say YAGNI until it's actually necessary.
Why would you blame developers for this?
This is management problem!
We have to make assumptions. Good software doesn't account for every future possiblity, but it is easy to change when the requirements change.
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.
(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...)
* correctness/verifiability analyses
* security? in compiled tools (prevent malicious re-configuration)
* an assumption of the inertia of law
* general incompetence/naivete
???
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.
This can’t be the case.
You have to apply the VAT of their own country to customer from other part of the union and some services are exempt.
In all likelihood, most systems in Denmark already supports using different VAT for different products. Plus, most accounting systems won’t be Denmark specific anyway but simply configured for it.
Is it doable? Sure. Does it need resources that could be more fruitfully applied elsewhere? Probably.
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.
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?
[edit] assuming we’re talking about VAT on things that everyone buys. Which is why tax codes often exempt essential items from VAT.
California is now doing this for electric car rebates. Only works for items pinned to a person.
This can easily be compensated for by simply giving the poor more rebate on income tax.
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.
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_...
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.
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...
[0] https://www.dr.dk/nyheder/politik/regeringen-vil-afskaffe-mo...
Nitpick, but it's actually only making books 20% cheaper; 100/125 = 0.8 (80%).
So, in 2015, 20% of 15-yo could not understand a simple text. Isn't that unbelievably high?
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.
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
[^1]: At least for citizens.
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.
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.
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 :)
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.
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.
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.
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 :-( .