Iceland slashes tax on music
Government announces a cut in V.A.T. rates from 24.5% to 7%
Reykjavik, 23rd November 2006
The Icelandic government has announced that it will cut the amount of V.A.T. it levies on recorded music goods from 24.5 per cent to seven per cent from March 2007 as part of a package to support the music industry.
Iceland currently has the second highest rate of sales tax on recorded music in the world. Only Hungary and Norway, who both levy rates of 25 per cent, tax recorded music sales more heavily.
The move comes after a 20-year campaign by the Icelandic national group of IFPI, the organisation that represents the recorded music industry worldwide. This has been a joint battle of IFPI together with the authors' and performers' organisations.
"Music is a powerful means of expression, underscoring important moments in people’s lives and evoking strong emotion. Since music is such an essential part of Icelandic culture, we believed that it was unfair to impose a higher rate of VAT on sound recordings compared to other cultural goods," says Gunnar Gudmundsson, representative of IFPI Iceland.
The government has also announced the formation of Music Export Iceland - a campaign backed by private enterprise and the Ministries of Culture, Foreign Affairs, Industry and Trade to support the export of Icelandic music. Iceland is well-known for such acts as Bjork and Sigur Ros.
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