As four Dutch parties strive to form a coalition government, following a dramatic win for Party for Freedom (PVV) last year, they’ve announced a tax hike on the culture and hospitality sector. This policy, put forward by the emerging coalition government, has significant implications and warrants our immediate attention.
The proposed increase in VAT (in Dutch: BTW) on arts and culture in the Netherlands is set to rise from a lower rate of 9% to the standard rate of 21%. As the founder of Peppered, which has been supporting the sector for over 20 years, this isn’t the first time we’ve experienced such economic challenges in our sector. It wasn’t that long ago that a previous Dutch government raised tax rates for cultural organisations which proved unsuccessful at generating extra public funds.
The Context of the Tax Increase
Historically, the Dutch government has provided a reduced tax rate for arts and culture to support these vital sectors. This policy has enabled broader public access to cultural activities, fostering a rich cultural landscape.
However, the current political climate, shaped by the recent rise of populist parties, threatens this supportive framework. The proposed tax increase is part of a broader political narrative aimed at repositioning cultural activities as elite hobbies rather than important contributions to the human experience.
Political Motivations and Economic Realities
The proposed VAT increase is a politically motivated move, aimed at punishing what is perceived as a left-wing elitist sector. This punitive measure is evident in the selective application of the tax increase. While books, concerts, and theatre tickets will be taxed at a higher rate, commercial cinemas, amusement parks, and camping sites will continue to enjoy the lower rate. This selective taxation highlights the ideological underpinnings of the policy.
Economically, similar measures in the past have shown that increasing the tax rate on cultural activities does not necessarily result in higher state revenue. Instead, it often leads to reduced attendance due to increased ticket prices which, ironically, only makes them less accessible and therefore, more elitist (if we can even call them that in the first place). The financial strain this would cause is obvious, undermining the sector's sustainability and its ambitions to be accessible to everyone from all cultural and economic backgrounds.
Despite the challenges created by this proposed tax change, CultureSuite is committed to providing sustainable solutions to the sector.
CultureSuite’s Commitment to Supporting the Sector
At CultureSuite, our mission is to develop sustainable digital technologies that empower the arts and culture sector. In response to the proposed tax increase, we are committed to several initiatives:
- Sustainable Digital Platform: Peppered is a SaaS platform providing venues with a more collective and sustainable structure rather than the traditional model of large investments every few years. Additionally, it enables websites using Peppered to receive updates every three weeks, ensuring they never become obsolete and get the necessary upgrades to ensure venues can thrive.
- Community Support: We set up our community platform, CultureHub, so venues can help support each other as well as directly influence the Peppered roadmap with features that will help the sector thrive. Bigger venues have sponsored new features which are then rolled out for all of the Peppered community to take advantage of. It’s exciting to see how this community initiative will transcend international borders.
- Referral Programs: We are exploring referral programs to ensure that cultural experiences are accessible to underprivileged communities. This initiative aims to maintain diversity and inclusivity in audience demographics despite economic pressures. Watch this space as we develop this program.
- Cost Reduction Strategies: We are investigating ways to offer discounted rates for our services, particularly for organisations that commit to long-term partnerships. This strategy aims to alleviate some of the financial burdens imposed by the tax increase.
- Peppered Marketing Tools: Peppered audience development tools including segmentation and personalisation features to aid in analytics. This empowers venues to learn more about their visitors and optimise the website for ticket sales.
Share your ideas!
We recognise that addressing these challenges requires collective effort. We invite cultural organisations, sector leaders, and stakeholders to collaborate with us. Share your ideas and suggestions on how we can better support you during this period. Together, we can develop innovative solutions to sustain and grow the cultural sector in the face of adversity.
Let us not view this as an insurmountable challenge but as an opportunity to reinforce the importance of arts and culture in our society. By working together, we can ensure that the cultural sector not only survives but thrives, continuing to enrich the lives of everyone in the Netherlands.
