Music Estonia urges lower VAT to prevent ticket price rises

Estonian concert organisers and cultural organisations are calling for a 9% value-added tax on tickets to cultural events, saying the measure would help prevent further price increases. ERR reported that Silvia Käsk, head of the Music Estonia Live branch, warned the current system was forcing organisers to accept growing losses or raise ticket prices.

“Concert organisers and venues say we cannot continue like this. All events are already slowly moving into the red,” Käsk said in an interview with Radio 2. She added that organisers could not cover rising costs indefinitely, while audiences were increasingly sensitive to ticket prices.

Käsk said the main effect of a possible VAT reduction would not necessarily be lower ticket prices, but preventing them from rising further.

“Some ticket prices may indeed fall, but I see the biggest effect as keeping them from going higher. We would prevent culture from becoming less accessible,” she said.

The proposal for a 9% VAT rate was developed by Kultuuritahe, an association bringing together creative unions and cultural organisations. Representatives of the sector have met with all parties in parliament and presented their proposals, but have not yet received concrete pledges because parties are still preparing their election platforms.

Estonia’s cultural sector has argued for years over a VAT exemption or reduced rate. Käsk said Estonia’s position was less favourable for cultural organisers than that of several other European countries. Latvia exempts tickets to some cultural events, while Lithuania and Finland also offer tax concessions, she said.

According to Käsk, a lower tax burden would also reduce the risks involved in bringing foreign artists to Estonia and organising tours by Estonian performers. She said touring was already a highly risky undertaking because costs had risen sharply.

Sector prefers better tax conditions to subsidies

A VAT cut would reduce state tax revenue, although Käsk said calculations had been made in cooperation with the Ministry of Culture. She said cultural support should not rely mainly on project grants.

“Culture is not simply a minus figure in the budget. The question is what we support and whether this is a good way to support culture,” Käsk said, noting that the administrative burden of grant applications was also growing as operating costs increased and more organisers sought additional funding.

Representatives of the cultural sector have also met repeatedly with the culture minister. Käsk said the Ministry of Culture supported the sector’s proposals, but the final decision depended on the government as a whole. “At the moment, the political will apparently does not exist,” she said.

Käsk also pointed to cultural tourism as a way to attract visitors to Estonia, saying they spend money on hotels, restaurants and other services.