Calls by the music industry for a cut in value-added-tax rates on CDs were ignored May 12 by European Union government representatives gathering in Brussels.


BRUSSELS -- Calls by the music industry for a cut in value-added-tax rates on CDs were ignored May 12 by European Union government representatives gathering in Brussels.

A key working group on tax discussed a compromise concerning general VAT rates, but music and other cultural issues were not included on the list of exempt sectors.

The door could now effectively be closed on efforts by the music industry to secure a lower rate. However, the decision on the matter will be taken either by EU ambassadors meeting in Brussels on May 26, or EU economic and finance ministers meeting in Luxembourg on June 7.

The International Federation of the Phonographic Industry pledged to continue its campaign for reduced VAT rates. "EU finance ministers need to end discrimination against sound recordings now by treating them like other cultural products such as books, newspapers, magazines and cinema tickets," comments Frances Moore, IFPI regional office for Europe director. "The European Parliament has called for this already and hundreds of thousands of consumers have signed petitions supporting such a move."

VAT on sound recordings is currently set at between 15-25%. Other cultural products such as magazines, newspapers, books and cinemas tickets benefit from reduced rates upwards of 5%.

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