Thursday, July 26, 2012

The increase in VAT and the increase of access to culture


Since the days of 'No War' did not see the cultural sector in this country screaming in the same direction and so vehemently. This time it is to show their disagreement by the Spanish intervention in an international war, but by the PP government's decision to increase VAT to cultural products to be placed in the 21%. An inconsistent decision of a right-wing party has returned to serve for the culture show their outrage and concern together. But let's go step by step, to see what has been decided by the Ministry of Finance with the tax rates on consumption in the culture.
The VAT (Value Added Tax) is an indirect tax levied on the action of eating. Any commercial transaction should generate an IVA. Being indirect is what is the consumer who is accountable to the Treasury, but that is the seller who has to settle with the state the tax value of products sold, even if the buyer who bears the burden the tax. In Spain, VAT was estimated at 16%, but the former socialist government set it at 18%, to try to raise more tax revenue. The novelty of the current increase in VAT is that the PP has decided to bring the VAT at 21%, increasing three points this time. The drama, but the variation occurs exerted on existing VAT rates. There are three VAT rates by type of product. The general (21%), low (8%) and the super-small (4%). This division is why it is considered that there are products that need protection because of their importance, respect for the tax lien. Among the products of super-reduced VAT include, for example, basic necessities such as fresh food or hygiene products. Among the 8% VAT were, until this reform, cultural products. Culture and their property, for their importance to training, education and prosperity of society, is considered to be paying less taxes. However, the Government of Mariano Rajoy, has decided to modify this view and place in cultural products of those who have to pay a VAT general. Which means they will pay 21% instead of the old 8%.
So, tickets to concerts, movies, museums, books, art purchases will be taxed on 21% of the cost, rather than eight percent. In practice, if a concert hall put a ticket at a price of 10 euros, the Treasury had to pay 0.8 € for VAT. Now you will pay € 2'1 per ticket sold. This means they have two-way cultural producers to take the tax: reduce their profit margins or raise the price of tickets to be the consumer to absorb the new tax. Either is dramatic consequences. Reducing the profit margin will only punish a sector already suffering from a severe structural crisis within the context of general economic crisis. On the contrary, increase the price of cultural product behave a sharp drop in consumption in a sector already suffering titanic losses. In this regard, the Minister of Education, Culture and Sports, José Ignacio Wert, in one of his usual statements praising nonsense, proposed to the companies that share the climb with consumers. That is, a little dripping all over the world, so we will all be a little more miserable still.
The cultural sector has responded with graceful protest this decision by the Spanish government. The Federation of Associations of Cultural Managers (FEAGC) issued a statement where shelled the negative elements of the reform. In broad strokes warned of the reduction that will occur in the supply and consumption of culture, the limitation will cultural diversity, the destruction of many jobs, and increasing social inequalities. A cluster of negative consequences that houses the cultural situation in Spain at a true crossroads of unpredictable outcome. Dispossess the culture of a special tax treatment can lead to nothing more than cultural consumption decrease, and reverse, the cultural level of this country. However, the culture will need to undertake a process of reinvention in order to stop the consequences of this blow.

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