Spanish Entertainment Industry Writes Mariano Rajoy, Alleges Tax Rates Killing Film Industry

The Spanish entertainment industry is reeling due to a huge tax hike attached to entertainment tickets. Industry heads have suggested that the hikes have resulted in a drop in earnings as well as a huge loss of jobs for those working in film and music.

The government introduced the rate hike during 2012, raising taxes on tickets for movies and concerts from 8 percent up to 21 percent by value, a whopping 13 percent increase.

"This has led to frustration, anger and deep concern on the part of the entertainment sector," wrote the heads of various branches of the Spanish associations of cultural enterprises. The president of the federation of movie exhibitors, Juan Ramon Gómez Fabra, noted that "we could have accepted a rise of 2 percent, but not 13 percent. The situation is very worrying."

Why the rise? Spain, like many other members of the European Union, is dealing with a huge deficit in the wake of the Eurozone crisis that began in 2009. The only way to to recoup is to either tax higher or cut spending more. Voters don't appreciate either, but governments simply have to deal with the reality of raising rates. A way to make it go down easier is to tax non-necessities, such as entertainment, versus greatly increasing rates of food products and fuel. Unfortunately, Spain has been particularly eager to throw its problems on the entertainment industry, as its rates are the highest in the European Union. Greece, which has served as the poster boy for nations struck by the crisis, has a 13 percent tax rate.

The letter addressed to the prime minister, Mariano Rajoy, states that attendance at movie theaters has dropped by 15 percent, along with a 12 percent cut in jobs. Fabra also blames the tax rate for the closure of 61 movie theaters.