Dutch sector ‘faces €350m loss’ over tax hike

The Netherlands’ creative sector faces a “disastrous” annual loss of €350 million in income as a result of the government’s cultural policy, it has been claimed

Trade body Kunsten ’92 says the government’s plan to raise the tax rate for the cultural and creative market by 12 percentage points from 2026 – in addition to reductions in municipal and government subsidies – will have a “negative domino effect” on the Dutch industry.

The warning follows analysis commissioned by private financiers, municipalities and the arts and culture industry, including Kunsten ’92 and the Culture Fund.

“The uncoordinated pile of cutbacks and measures has an enormous impact on the entire arts and culture sector, both in the short and long term,” says Culture Fund director Cathelijne Broers. “For the first time, the data from this consortium has been combined and analysed and it shows that the entire arts and culture sector is being affected with a loss of €350 million per year in income. This is due to the decrease in audience, less subsidy and less private income.”

Under proposals from the country’s new right-wing government, the VAT rate for concert, festival, sports and museum tickets, in addition to books, hotels and newspapers, would increase from 9% to 21%. The government says the increase will generate €2.2bn a year for the treasury, but campaigners say it will add more than 10% to the price of tickets.

“The VAT measure costs the sector more than it brings in for the state treasury”

“The VAT measure costs the sector more than it brings in for the state treasury,” continues Broers. “The miscalculation is that the price elasticity of the VAT increase does not include the increase in the prices of entrance tickets due to the rising costs for personnel, materials and energy. The assumption is 5-6% less public revenue, but that is more like 9-12%.”

Together with the creative industry, the Dutch arts and culture sector is provides work for 392,000 people. The consortium is urgently requesting a postponement of the VAT increase to enable a “thorough investigation” of the actual revenues and consequences for the business.

“The arts and culture sector just experienced the ‘perfect storm’: the corona pandemic, energy crisis and cost increases dealt heavy blows to makers and organisations,” adds Jeroen Bartelse, co-chair of Kunsten ’92. “This analysis shows that the accumulation of measures will hit the sector amidships again. Taken together, these measures have a greater financial impact than the draconian cuts of the Rutte I cabinet in the period 2010-2012.”

On 3 June, a full-page advert appeared in every national and regional newspaper with the message #nohigherebtw (nohigherVAT) on behalf of a coalition of organisations in the Netherlands including the Association of Dutch Music Venues and Festivals’ (VNPF), as well as other groups across culture, media, catering, books and sports.

The VNPF has previously called on the authorities to reconsider the tax hike, warning it could have grave consequences for the domestic live music business.

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