The curtain starts to fall: theater audiences down third after VAT hike

The figures could not have been more devastating. The effects of last year's hike in the value-added tax (VAT) rate on theater tickets from eight to 21 percent are starting to bleed attendances dry.

This is the sad finding of a detailed study released by theater producers on Thursday. In the four months following the introduction of the new VAT rate - from September 1 to December 31 last year - theater audiences diminished by 1.8 million spectators in comparison with the same period the year before - 31.43 percent - while net takings are down 33 percent and 600 direct jobs have been lost.

The foyer of the Coliseum theater in Madrid, where around 60 producers and theatrical agents had assembled to learn the uncomfortable findings of the report, was full of long faces after the announcement of the figures on Thursday. The heads of FAETEDA, the State Federation of Theater and Dance Companies Associations, described the consequences of the "disproportionate increase" in the VAT rate on the dramatic arts as "tragic and devastating" and called on the government to repeal the measure immediately.

According to the study, which is now in the hands of the Finance Ministry, theater companies have lost over 33 million euros as a result of the enormous drop in attendance.

Revoking the hike would bring 2.5 million more people back into theaters

The effects of the VAT hike come on top of those caused by the general economic crisis gripping Spain. Consumption is down, while the lack of available money from local governments - the main contractors of theater companies - has led to the disappearance of the tours that once allowed them to squeeze a profit from their investments.

The study suggests that the situation would be reversible if the government revoked the VAT rise. According to FAETEDA, a 10-percent VAT rate instead of the 21-percent rate would allow the industry to bring 2.5 million more people back through the doors of the country's theaters, earn net takings of 53 million euros and recover 1,800 jobs over the course of a year, with the consequent positive impact on the state coffers in the form of collected taxes and Social Security contributions.

FAETEDA chiefs have been maintaining periodical meetings with the relevant ministries, but without any results. The federation's president, Daniel Martínez, said they had encountered "solidarity and comprehension" from leaders in the Culture Ministry, but that the Finance Ministry was the one putting up a barrier.

José Luis Gómez, head of the Abadía theater in Madrid and one of the most authoritative figures in the Spanish theater, was skeptical about a repeal of the hike, but nevertheless expressed some optimism. "I think the distinguished and enlightened politicians, who exist in all the parties, will find a way to fix this mess."

Juanjo Seoane, one of three members of the Tricicle company, categorized it as "disgraceful" that Spain is the European country with the highest VAT rate on culture - in Norway the rate is zero, while in Germany it is seven percent and in France it is 5.5 percent, with a super-reduced rate of 2.1 percent for the first 140 performances. He pointed out that some countries - the Netherlands, where the rate is six percent, and Portugal, 13 percent - took the decision to lower VAT on culture when they saw the negative effects that raising it had had on the industry.

"Let them take note," Martínez warned.