European artists call for a VAT reduction to end cultural discrimination against music

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Over one thousand artists from across Europe have signed petitions urging a VAT cut on sound recordings

Brussels, 3rd June, 2003

Artists from all across Europe called on the EU today to give music a break. They want an end to the unjust system where recorded music is classed at standard VAT rates while other cultural products books, newspapers, magazines, theatre and cinema tickets benefit from reduced rates.

Alex Callier of the Belgian pop group Hooverphonic and the German singer of children's songs Rolf Zuckowski presented to the media a VAT Petition that has been signed by over 1,200 artists from across Europe. The Petition, which has been sent to the 20 European Commissioners, calls on the EU to put an urgent end to cultural discrimination against music.

Many leading artists from the rock and pop world have signed petitions calling for a VAT reduction on sound recordings including Elton John (UK); Johnny Hallyday, Françoise Hardy and Patrick Bruel (France); Laura Pausini, Eros Ramazzotti and Zucchero (Italy); Chris de Burgh (Ireland); Nana Mouskouri (Greece); Herman van Veen (Netherlands); Axelle Red (Belgium); and Julio Iglesias (Spain). Classical artists who have signed include Andrea Bocelli and Cecilia Bartoli (Italy), Anne-Sophie Mutter (Germany), Barbara Hendriks (Sweden) and Roberto Alagna (France). These stars have been joined by scores of national and local artists in a joint call for a VAT cut for recorded music.

Alex Callier of Hooverphonic said: "When someone buys a biography of Jacques Brel in Belgium he pays a VAT rate of 6%, but if he buys a CD of his music he has to pay a rate of 21% VAT. This makes no sense and does not recognise the cultural role of musical artists. It is simply unfair to impose standard VAT rates on music while other cultural goods benefit from reduced rates."

The European Commission is currently considering changes to the EU's system of reduced rates as part of a review of the 6th VAT Directive. It is expected to come forward with a proposal on reduced rates before the summer break. Any final decision requires an unanimous vote by EU Finance Ministers. France and a number of EU governments have already expressed the wish to treat sound recordings as cultural goods from a VAT viewpoint.

VAT on sound recordings is currently set at between 15% and 25% while other cultural products and services have rates upwards of 5 per cent. VAT rates on CDs in the European Union currently range from Sweden and Denmark (25%) to Finland (22%), Ireland and Belgium (21%), Italy and Austria (20%), France (19.6%), Netherlands and Portugal (19%), Greece (18%), UK (17.5%), Spain and Germany (16%) and Luxembourg (15%).

Entertainment retailers have confirmed that the benefits of a VAT reduction would be maximised for European consumers, making music more accessible for everybody.

Rolf Zuckowski said: " We have the most incredible range of music in Europe, from Scandinavian pop to German classical and British rock. A VAT reduction would help support all this cultural diversity and improve access to our music for everyone. This is particularly important for young people and children since music plays a vital role in their sense of identity and they feel a very close connection with music."

Research suggests that the music market, which is currently suffering from declining sales and widespread piracy, would be given an enormous boost by a VAT reduction. A five-country survey carried out last year by research agency Martin Hamblin GfK, suggests that increased sales would compensate governments for any loss of revenue resulting from a VAT reduction on sound recordings within a period of one to two years. Since pirates don't pay VAT, any measure that leads to a rise in sales of legitimate recordings would also bring in more tax revenue for governments.

Music fans can show their support for a VAT reduction on recorded music by signing a consumer petition on-line that can be accessed from today at http://212.134.114.163/vat-st/ and from 16th June at www.givemusicabreak.com. The consumer petition will gather signatures during the summer and will be presented to the EU institutions in the autumn. A French version of the consumer petition that can be accessed at www.baissedelatva.com/popup/popup.htm has already gathered tens of thousands of signatures in France and Belgium. A Belgian version of the consumer petition can be accessed at http://www.baissedelatva.be or http://www.lagebtw.be.

For further information, please contact:
Francine Cunningham, IFPI, Tel: +32 (0)2 511 92 08, francine.cunningham@ifpi.org;
Gabrielle Guallar, Impala, Tel: +32 (0)2 289 26 00, gguallar@kernnet.com

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