The Association of the Music Industry, representing the largest entities involved in organizing and implementing mass cultural events, has stated the proposed increase in the VAT rate on tickets from 10 to 14 or 21 percent. In the report, the Association claims that this increase would negatively affect cultural and sporting events in the Czech Republic and tax collection.
According to the Association of the Music Industry, the proposed increase would reduce the number of tickets sold, resulting in a decline in event planning due to the increased risk. The statement cites the current stagnation and decline in ticket sales for cultural events in the face of massive inflation, which is already burdening Czech citizens.
Before news of the potential VAT increase on tickets became public, the Association of the Music Industry sent a letter to the Ministry of Culture, Ministry of Finance, Ministry of Industry and Trade, and the Prime Minister, describing the potential consequences of the increase. In response, the Ministry of Finance stated that the government must take drastic action, a general position that the Association of the Music Industry understands. They also met with the Minister of Culture Baxa but did not feel their concerns were understood.
The Association of the Music Industry ultimately joined forces with other cultural associations, sending another letter to the same addresses. They have not yet received a response to this letter but have had another meeting with Minister Baxa. The Association reiterated their arguments but did not believe he fully understood the situation, mainly that less money would be collected. The Association also mentioned that smaller agencies might create new companies that do not pay VAT on tickets.
In the statement, the Association further claims that countries with a maximum VAT rate of ten percent have many festivals and mega-concerts of the most prominent foreign performers throughout the year. In contrast, foreign productions avoid countries with above ten percent VAT rates.
According to the Association, they compete with Germany and Poland for the same concert offerings. They argue that Slovakia and Hungary are severely disadvantaged due to their over twenty percent VAT rates.