Estonia not planning to cut VAT on festival and concert tickets

Several summer music festivals in Estonia have been called off after ticket sales fell short, while the Ministry of Culture says it has no plans to push for a lower value-added tax on event tickets, preferring targeted support instead.

The inaugural EFEFEST was cancelled after only a few dozen tickets had been sold for the August event. The lineup included Lexsoul Dancemachine, EiK and RETI, and Culture Minister Heidy Purga was scheduled to perform as a DJ. Organisers said the event had been announced and marketed too late. The Suvealguse Festival in Elva and the Samura Festival, planned for early August, were also scrapped because of poor ticket sales.

Despite the cancellations, Silvia Käsk, head of Music Estonia's live music division, said interest in culture remains strong. She cited Statistics Estonia's 2023 data, according to which 79 percent of the population took part in cultural activities and 47.4 percent attended at least one concert. At the same time, the large number of events means intense competition, and organisers increasingly need to invest in high-quality programming, targeted marketing and a good visitor experience. A Ministry of Culture study found that people who do not attend cultural events often mention high ticket prices, extra travel and accommodation costs, lack of time and transport difficulties.

Maria Leis, communications manager at Eesti Kontsert, said Eurostat data point to an oversupply in the creative sector, especially in a country where purchasing power is below the EU average.

Roman Demtšenko, head of concert promotion agency Damn.Loud, said Tallinn's concert scene has reached a high European standard and international artists' interest in Estonia has grown significantly over the past decade. However, festivals face particular challenges: a short summer, weather conditions and a small population. Even a sold-out show may not be profitable, because organisers give up nearly 30 percent of their budgets to the 24 percent VAT, a 5 percent fee to the Estonian Authors' Society and ticketing service fees. He cited a recent sold-out concert by punk band The Exploited as an example of an event that looked successful but was unlikely to have made money. Many promoters have been operating at a loss but cannot pause their work because of existing contracts and obligations.

The cultural sector is calling for the VAT on event tickets to be cut to 9 percent. In Finland the rate is 13.5 percent, in Lithuania 12 percent, and Latvia applies a zero percent rate to cultural events. Estonia is among the highest in Europe. Music Estonia has met political parties and discussed the issue with the government. Käsk argues that a lower VAT rate would allow organisers to invest in quality, keep tickets more affordable and attract international events, while tickets account for only a small share of festivalgoers' spending and much of the money stays in the local economy.

The Ministry of Culture, however, favours targeted funding over a tax cut. It said audience numbers are determined by supply and demand, and VAT rates fall under the authority of the Ministry of Finance and the government.