VAT’s It For Rabarock

The quadrupling of value-added tax (VAT) on concert tickets has forced Rabarock Festival in Estonia to cancel its 2010 edition and return in 2011.

This year’s event reflected the fact that the country is reckoned to be one of the EU’s biggest sufferers from the economic downturn. The 4,000-per-day crowd was one-third down from 2008.

In May the government announced that effective from July 1 the VAT rate would be raised from the 5 percent that had applied for tickets to concerts and cultural events to the standard rate of 18 percent. It has since increased the standard rate to 20 percent.

Rabarock co-organizer Kristo Rajasaare blames government policies that are “hostile to culture,” although there are signs that the Estonian live music industry is uniting to lobby for change.

A new association called Estonian Music Development Centre, which hopes to unite organizations and entrepreneurs from all music genres, is applying for money from a creative industries’ funding tool with a view to build the music business on a more professional basis.

“We are making a real effort right now in putting the whole strategy in place,” says Helen Sildna, founder of Tallinn Music Week.
Apart from lobbying the government over VAT and other issues, EMDC also plans to set up a two-year training programme for young music managers wanting to start up their own management companies or agencies.

The inaugural Rabarock in 2005 attracted only 5,000 fans over two days, but major sponsors including SEB Bank and Jagermeister have stuck with it, making it something of a flagship for a virtually non-existent Baltic festival market.