The income tax rate paid by authors on royalties has been reduced from 15% to 7.5%. This incentive was announced at a press conference held this morning addressed by the Minister for Education, Sport, Youth, Research and Innovation, Hon. Clifton Grima, and the Executive Chairperson of the National Book Council (NBC), Mark Camilleri.
The NBC’s legislative work regarding the tax rate paid by authors on royalties commenced in 2020 with the publication of a draft law which proposed, amongst other suggestions, fiscal incentives to encourage industry stakeholders to adhere to professional standards, especially with respect to making authors’ royalty payments tax-free, and allowing publishers to claim a 200% tax refund over all royalty payments paid to authors.
In his speech, On. Clifton Grima claimed that the Government believes that “for the cultural, artistic and creative sectors to continue to develop sustainably in order to offer their contribution to the strengthening of society, we need to continue striving to work in favour of artists’ work and their creativity – not least authors.” On. Grima stressed that the economic strengthening of the book industry is of national importance since the artist plays a significant role in a democratic society as well as a country’s life.
Camilleri commenced his speech by thanking the Government for this tax reduction, which will translate to more funds and resources for authors to publish and hone their craft. Since the NBC originally requested the removal of this tax, the NBC is committed to keep striving for this objective in light of the fact that this goal has been met halfway. Camilleri added that since the Government’s overall income from tax paid by authors on royalties is small, he believes that the positive aspects emerging from the removal of the tax on the book industry would be greater than the negative outcome of less income for the Government on tax.
Camilleri also referred to the NBC’s second request, which complements the first one, whereby publishers could ask for a full refund over royalty payments paid to authors, up to a maximum of 200% on the tax paid.
In conclusion, Camilleri said that the National Book Council will continue striving for the economic independence of its stakeholders, authors and publishers being prominent amongst them. He also mentioned that in 2023, the NBC for the first time awarded publishers whose publications won the National Book Prize, apart from awarding the authors as customary.