RENEE MONTAGNE, HOST:

In Spain, new austerity measures mean higher sales tax on everything from clothing to wine, to tickets to a play. It's the latest blow to Spaniards, but in one small town, a local theater director has come up with a rather creative way to get around the huge jump in a tax on tickets. Lauren Frayer explains it involves carrots, not sticks.

LAUREN FRAYER, BYLINE: When the Spanish government hiked sales tax on theater tickets this past summer, Quim Marcé thought his theater was doomed. With one in four locals unemployed, Marcé knew that even a modest hike in ticket prices might leave the 300-seat Bescanó Theater empty.

QUIM MARCE: (Through translator) We said, this is the end of our theater and many others. But then the next morning, I thought, we've got to do something, so that we don't pay this 21 percent, and we pay something more fair.

FRAYER: He looked out his window at farmland that surrounds this village, two hours north of Barcelona, and suddenly had an idea: Instead of selling tickets to his shows, he'd sell carrots instead.

MARCE: (Through translator) We sell one carrot, which costs 13 euros, very expensive for a carrot. But then we give away admissions to our show for free. So we end up paying four percent tax on the carrot, rather than 21 percent, which is the government's new tax rate for theater tickets.

FRAYER: Classified as a staple, carrots were spared new tax hikes that went into effect here September 1st. The highest value-added tax rate on things like cars and clothing went from 18 to 21 percent. Sales tax on movie and theater tickets jumped from eight to 21 percent.

UNIDENTIFIED GROUP: (Chanting in Spanish)

FRAYER: Such tax increases have sent tens of thousands of Spaniards into the streets to protest every weekend since the new rates took effect. Pilar Bayé is a civil servant in Bescanó who traveled to Barcelona to take part in protests. She also bought a ticket, or rather, a carrot, for a performance this month.

PILAR BAYE: (Through translator) It seems to me like a good idea, because culture shouldn't be taxed so much. Culture should be accessible to all the people.

FRAYER: Spanish media have dubbed this the Carrot Rebellion, and the Bescanó Theater has won kudos from arts advocates nationwide. Shows are sold out. But the theater must also follow the law, says economist Fernando Fernandez at Madrid's IE Business School.

FERNANDO FERNANDEZ: This is called tax evasion. I mean, we may like it, because it has to do with culture. And we like people going to the theater. But this is called tax evasion.

FRAYER: The Spanish government says tax hikes are necessary to avoid an EU bailout. But Fernandez says that if some people don't pay what they owe...

FERNANDEZ: This makes people who do pay taxes have to pay a larger tax. And this makes more difficult to get a fiscal target. So I would have to denounce this just as much as we denounce, you know, the filthy rich who don't want to pay taxes. We should do the same.

FRAYER: Marcé, the theater director, consulted a lawyer and got approval from the mayor for his carrot sales. Many Spaniards think the Carrot Rebellion is pretty clever. And Marcé acknowledges playing up all the humor in all this.

MARCE: (Through translator) There's always an announcement before the show begins, that says photos are not permitted and that you should turn off your cell phone. So now we're going to add, no chomping loudly on your carrots during the show.

FRAYER: He a little worried the government might ban carrots at theaters. But dozens of foods are considered staples and taxed at only four percent. So if that happens, Marcé says he might switch to selling tomatoes instead.

MARCE: For NPR News, I'm Lauren Frayer.

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MONTAGNE: This is NPR News.

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