BRUSSELS — European Union regulators will not allow governments to cut value-added tax on CDs, videocassettes and DVDs — a blow to local music and video industries.
A proposal from EU executive arm the European Commission, released Tuesday, favors lowering VAT on some services like meals in restaurants, but not on music and vid products, shrugging off a high-profile campaign waged by both industries.
“We’re disappointed, but it’s not unexpected,” said Charlotte Lund Thomsen, secretary general of Europe’s Intl. Video Federation. She vowed the org’s battle for lower taxes on videos and DVDs would continue.
Thomsen added that Brussels had missed a chance to boost the European film industry as well as music and video businesses. “By reducing VAT on video, the commission would have diverted more money to Europe’s film producers. This is why the Intl. Federation of Film Producers’ Assns. was a part of our campaign.”
Regulators said reducing VAT would have little effect on consumer prices and that even if they changed the rules, it would be optional for Euro countries to cut rates and few were likely to do so.