The first pan-European CD in the guise of a book has been released by top independent label Ninja Tune, featuring artist Kid Koala. The CD is zero-rated for VAT as a book in the UK. An ordinary CD is not treated as a cultural product and would attract top rate VAT. The release coincides with a rally at the Finance Ministry in Brussels to take place at 11am this coming Thursday 20th November, to exert pressure on Finance Ministers ahead of the 25 November EcoFin meeting in Brussels. Protestors include rights holders across the music spectrum - from authors, composers, music publishers, performing artists, artist managers, independent and major record companies, entertainment retailers and collective management societies. This is to highlight the absurdity of EU VAT of the VAT discrimination between cultural products that currently applies in the EU. The AIM/Ninja initiative is supported by Impala (The international independent record companies and publishers trade association) as part of its pan-European campaign for VAT equality between music and other cultural products.

Independent music companies hope that the Kid Koala CD/book and forthcoming rally will help the music sector illustrate its call on EU Finance ministers to put an end to the cultural discrimination against music. On 25th November in Brussels, they will be discussing the status of sound recordings in the context of the revision of the EU¹s 6th VAT Directive and Annex H, which lists products and services to which a reduced VAT rate can be applied. The European Parliament has already demonstrated its support for a VAT reduction on sound recordings on several occasions. The Italian Presidency has also recently proposed a compromise deal that includes putting sound recordings into Annex H. A final decision by the Ministers is expected before the end of the year.

The independents are part of the industry-wide VAT Coalition to represent the industry’s united position on the issue. Entertainment retailers and record companies have given a public undertaking to maximise the benefits of a VAT reduction for European consumers. The Kid Koala CD is practical evidence of the importance of the VAT issue for small and medium sized companies the market innovators. The campaign is about consumers, youth, diversity, new artists and writers and all music companies. A VAT reduction will rekindle consumer interest. They will experiment more. They will buy more new specialist music produced by independent music companies who will be themselves be able to take more risks and foster more new artists.

The Kid Koala package includes a CD, a comic and a game, which means it could be registered as a book for VAT. In the EU, the rates of VAT on sound recordings range from 15% in Luxembourg to 25% in Denmark and Sweden but other cultural goods and services such as books attract low or zero rates. Consumers currently pay a low VAT rate when they buy a book of Jim Morrison’s writings or a music sheet, but a high rate when they buy one of his CDs. This is illogical and unjustifiable.

Peter Quicke, MD of Ninja Tune and Deputy Chairman of AIM (Association of Independent Music - UK) said: "We felt that the best way of demonstrating the absurdity of the VAT discrimination against music would be to allow politicians and fans to see the evidence for themselves. Kid Koala has just embarked on his European tour "The Short Attention Span Theatre" a name I hope won't reflect proceedings at the EU Finance Ministers meeting. Everyone should get down to the Finance Ministry in Brussels on Thursday 20th November and insist they pay attention. "

Alison Wenham, Chairman and Chief Executive, AIM and Vice President of IMPALA commented: "This campaign speaks most eloquently to the cultural discrimination point. Music is a universal cultural language which transcends the spoken or written word, and yet is currently denied cultural status".

Michel Lambot, President of Impala and co-chairman of Play it Again Sam/Vital added: "We welcome Ninja Tune’s initiative. It is typical of the innovation and diversity of the independent sector. This demonstrates respect to the consumer who deserves better than the current high rates levied on music. The EU must follow the Italian Presidency proposal and listen to the European Parliament. This is about democracy. What kind of message would the EU send about its commitment to cultural diversity if it ignores the voice of the European people?"