Spanish protest against the VAT rise in the cultural sector that implies a rise from 8 to 21 percent affecting theatre, movie and concert tickets, while museums, exhibitions and libraries face a rise from 8 to 10.

THe SGAE (Sociedad General de Autores/General Society of Authors) has issued a statement deploring the government move to increase VAT in culture as it will bring more unemployment and less revenue for the Treasury.

The culture industry generates 503,700 jobs in Spain and account for 4% of GDP. The action taken by the Government to increase VAT on cultural goods and services for 13 points (from 8% to 21%) contravenes the provision of Article 44.1. of the Constitution:" The public authorities shall promote and watch over access to culture, to which all have a right."

The tax increase has a negative impact on public access to culture. This increases the impacts of the economic crisis as the final product will be more expensive, which makes it difficult for the industrial progression of the cultural sector that is a key sector for the country. But it also limits access to cultural offer for disadvantaged families by promoting the social gap.

According to the report commissioned by the Federation of Film Distributors and the Federation of Cinemas in Spain to PricewaterhouseCoopers, tax benefits in movie theatres will descend almost ten million euros with the VAT of 21%, forcing the closure of 859 movie theatres (21% of the 4044 registered in 2011). This means laying off 3,500 employees. According to the study, if the increase was to occur in only two points (from 8% to 10%), as expected by the industry, the destruction of jobs would be reduced to 540 compared to the foreseen 3507 and revenue expected would amount to 1.55 billion euros. With a VAT of 21%, there will be a loss of 8.21 million euros. Thus, the consultant concluded that the Treasury would lose 9.76 million euros with the decision.

Spanish cultural institutions, already suffering the consequences of funding cuts, fear that major tax increase since 1 September can put them over the edge. 
From Saturday, 1 September, the value added tax (VAT) for a series of cultural activities will rise from 8 to 21 percent as part of a comprehensive program of measures of the conservative government of Mariano Rajoy in order to increase revenues, reduce deficit and avoid a European economic rescue.

Spain, which has produced Oscar-winning films by director Pedro Almodóvar and books of famour author Carlos Ruiz Zafón, has been crippled by a debt crisis after the bursting of the housing bubble in 2008 and is undergoing its second recession in three years .

The culture industry warns that tax increase will bring a sharp drop in the number of viewers, the closure of movie theatres and further loss of jobs in a country where the unemployment rate touches 25 percent of the workforce.

“The tax increase is a major setback for the development of the Spanish art and seriously wounds a sector with great economic and employment potential”, said SGAE.

The SGAE wants the prime minister, Mariano Rajoy, to withdraw the measure.

More than 4,000 industry associations had requested the Government that in its council of ministers on 31 August they would grant a transition periof of six months to implement the new tax - which was not granted - in a last minute move to save an industry that represents four percent of gross domestic product and employs 550,000 people.

Associations, grouped as UAEICE, said the rise would drive away its 43 million viewers, bring losses of 530 million euros in ticket sales and lead to the closing of 20 percent of companies in music, film and arts.

Similar tax increases for cultural activities in the Netherlands, Hungary and Portugal affected tax revenues, forcing governments to back down, said a study by consultancy PricewaterhouseCoopers.

The opposition parties also requested the governing party to reconsider the measure to raise the tax on cultural activities, and to introduce a reduced rate rather than the standard rate.

With the rise, the taxes in the cultural sector in Spain doubled the average percentage of 10.1 percent in the eurozone, according to the newspaper El País.

Rajoy's tax plan is part of the last dose of government austerity, seeking to reduce its public deficit by 65,000 million for 2014.

The sector is already feeling the effects of the 15 percent reduction in the budget allocated to culture and the late payment of local authorities - the main source of income for touring theatre, dance and music throughout the country .

Local and regional governments, which spent large sums of money in an era of easy credit, are now at the center of the national debt crisis.

While municipalities are struggling to pay the bills, even for basic services such as street cleaning and hospitals, their tradition of sponsoring music festivals and theatre is threatened.

Meanwhile, orchestras cut their members, theatre companies opt for cheaper production and distribution with less actors - the monologues are booming - and film productions have almost paralyzed. The cinemas have for years suffered a decline in box office by digital piracy.

SGAE, which manages the rights of music, literature, theatre and film, warned that the VAT rise will increase piracy in a country that is already among the foremost violators of copyright.

Museums and art galleries are also victims of the government action. Public museums are free, but are struggling to offset cuts of the government.

The Museum Prado in Madrid, which houses masterpieces by Francisco Goya and Diego Velázquez, started to keep their doors for seven days a week hoping to compensate in ticket sales  the reduction of 12,600 million euros of subsidies.

http://www.elmercuriodigital.net/2012/09/espanolas-y-espanoles-se-rebelan-contra_1.html