The government will abolish the 20% “reading tax” on ebooks and online newspapers from December, although it is unclear whether publishers will pass the full saving on to customers.

Printed books and newspapers have always been zero-rated for VAT but until now their digital equivalents – such as books from Amazon’s Kindle service or online subscriptions to news websites such as the Times or the Guardian – have been subject to the sales tax.

Chancellor, Rishi Sunak, confirmed the change would also impact audiobooks, online magazines and academic journals – which will aid the budgets of university libraries.

He said a “world class education will help the next generation thrive and nothing could be more fundamental to that than reading”, estimating the change would cost the Treasury £200m a year in lost revenue by 2025.

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