Icelandic tax news anyone? Go on, you know want it. The Icelandic government has announced it will cut the amount of sales tax it levies on recorded music goods as of next March. Iceland currently has the second highest rate of VAT on recorded music - 24.5% - second only to Hungary and Norway where VAT on music is 25%. However, as part of a package of measures by the Icelandic government to support its native music industry, the rate there will be slashed to 7% next year.
The move comes after a 20 year campaign by the Icelandic branch of the International Federation Of The Phonographic Industry and author and performer organisations to have sales taxes on recorded music cut. Welcoming the move, Gunnar Gudmundsson of IFPI Iceland said yesterday: "Music is a powerful means of expression, underscoring important moments in people's lives and evoking strong emotion. Since music is such an essential part of Icelandic culture, we believed that it was unfair to impose a higher rate of VAT on sound recordings compared to other cultural goods".
The Icelandic government also announced the formation of a programme called Music Export Iceland which will see government ministries work with music companies to promote Icelandic artists abroad.