Spain Urged to Reconsider Tax Hike on Admissions Tickets

11:57 AM PST 12/10/2012 by Pamela Rolfe

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In an open letter to the prime minister, organizations say raising taxes to record levels will damage the cultural sectors, destroy jobs and increase piracy.

MADRID - A broad range of international and Spanish cultural industry organizations, including the Motion Picture Association, banded together Monday to formally request the Spanish government reconsider its recent sales tax hike from 8 percent to 21 percent on admissions tickets, making it one of Europe's only countries to not apply a reduced tax on admissions to cultural activities.

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The group lobbied for a recalibrated rate for cultural content and services to 10 percent, as proposed by the recently established Union of Cultural Industry Associations in Spain, saying it has urged the Prime Minister Mariano Rajoy to adopt the new rate as part of the Spanish government's General Budget law to be passed this month.

"The VAT rate of 21 percent has already damaged the companies and individuals working in the cultural sectors concerned," the group with members around the globe said in a statement. "This was also predicted in the recent study prepared by Price Waterhouse, on behalf of the cinema sector, which showed that a 10 percent level VAT generated more state income than the newly introduced rate of 21 percent."

The group, representing the film industry, drama, live music, circus and opera, comprises 12 organizations: the MPA; The Federation of European Film Directors; The International Federation of Film Distributors Associations; The International Federation of Film Producers Associations; The International Federation of Musicians; The International Union of Cinemas; Performing Arts Employers Associations League Europe; The International Video Federation; The Independent Film & Television Alliance; The European Coordination of Independent Producers; The International Federation of Actors; and The Global Union for Media, Entertainment and Arts.

The Spanish government raised the tax effective Sept. 1 as part of a broad range of measures designed to attack Spain's ailing economy, weighed down by 25 percent unemployment.