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Respite for the cinema

VAT reduction should become a cheaper ticket price

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Respite for the cinema

The VAT rebate for cinema, from 21% to 10%, is an excellent opportunity to check effects of a tax reduction on a relevant market. As a mean, provision should reduce price of tickets at 0.66 euros, which, also as average in Spain, cost 7.3 euros. In pure logic, since VAT is a cascading tribute paid by consumer (spectator), movie tickets should be cheaper in those 66 cents; But experience of or markets shows that falling costs are not usually passed on to customer, but are incorporated into benefits. It will be necessary to verify to what extent decline of VAT to inputs is transferred, which would be desirable; Because some exhibitors have hastened to declare that y maintained prices without affecting previous rise in 21% tax.

Previous Editorials

Singular budget (03/04/2017)

Drift Culture (04/11/2013)

Without any reservation, VAT reduction is good news for culture in general and cinema in particular. Imposing maximum rate of a tax on a cultural industry is only justified at very exceptional times. That said, it is of justice to remember that VAT is not main problem of Spanish cinema. In fact, 0.66 euros that will be saved-at best- spectator at box office will not be an extraordinary stimulus for spectators to go to halls en masse. An unnecessary obstacle is overcome, yes, but price of armchair would have to go down considerably more so that it had a significant effect on collection.

The right strategy for Spanish cinema is to set up an industry that is still weak, capable of producing films that connect with public and is in a position to compete with new audiovisual businesses. And se are aspects in which Spanish cinema is lagging behind.

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