iTax on tablets and smartphones?

16 May 2013

latestipadYou’ve got to hand it to the French. Since the nineties, they have taken steps to protect their cultural media, by requiring radio stations to play a certain percentage of songs in French (as otherwise, who would?) and slapping levies on film and television companies that go towards producing French films and TV programmes. Some of them are even good (Spiral. Contains Gregory Fitoussi)

Now, however, the French are concerned that today’s new media, with streaming services and tablet technology, means that lots of people are watching media with no payback for l’exception culturelle. So the French Government have had a new plan.

Humourously and originally nicknamed the iTax, the proposals outlined in a new report want to charge a 1% tax on sales of smartphones and tablets as a way of drawing companies like Apple and Google, and other dubiously-located tech companies within the French tax net, playing the cultural card as validation.

"Today we have extremely sophisticated technological equipment that is extremely expensive to buy, but which contributes nothing to the financing of the works that circulate on that same equipment," said Culture Minister Aurelie Filipetti said following the release of the report.

"Companies that make these tablets must, in a minor way, be made to contribute part of the revenue from their sales to help creators."

At the moment it is unclear whether this could be a sales tax levied on consumers, or a charge for the company making French sales, which could be far harder to enforce. Either way, it will be consumers who end up paying more, even if just to keep preserve multi-million Euro profits, but would it even work?

The French have form with this type of thing, challenging Google over taxing rights of ads placed on Google Adwords by French companies. Instead Google gave them €60million for their cultural coffers to shut them up. And surely French consumers watch their French films and listen to their French music on the same devices as culturally-void US stuff. And no-one seems to have considered the fact that France borders quite a number of non-iTax-charging countries- it’d be very easy just to nip over the border and save yourself a few Euro, thereby damaging French businesses too.

Any detailed proposals adopted will be put forward in a November Budget document. Let’s hope this is one French craze (besides fries, knickers and polishing) that doesn’t catch on over here.

9 comments

  • Grammar N.
    There's actually similar debate going on over here regarding the reward of the creators of content. The new private copying laws being introduced pursuant to a European Directive which allows governments to charge a levy to compensate creators won't actually include a levy over when they are introduced (unless there is a big U-Turn before they're introduced). Creators don't really like that and point to the profits made by the tech companies on the back of their content (i.e. without the creators creating content an iPod would be redundant) but ultimately any levy charged is always going to be passed back on to the consumer.
  • JonB
    I hope they add the charge to all electronic equipment: TVs, BR/DVD players, set-top boxes, radios, etc. as they all benefit from creative works and would not be sold if it weren't for those works.
  • Euan
    Without the creators creating content, tape decks would've been pretty redundant too. If they didn't need a tax then, I fail to see why they need one now...
  • tom
    Oh I do love the french sometimes. They have got some stuff right, companies can't just close factories and move to other 'cheaper' countries, better health care, better child care etc and a real sense of national pride. Unlike us Brits who get their balls kicked if they try and preserve a tradition and get called unaccommodating for other cultures. They are French though so that's why I am out.
  • LL J.
    Pfft, this tax (like any such scheme) will end up filling brown paper bags for government cronies. Either that or be claimed by corporations with little obligation to distribute any of it to their creatives.
  • Big M.
    Just add it to the already existing apple-tax. And start taxing penny-farthings too.
  • jim
    merde
  • SB
    @ Euan you're right that the tape would have been redundant, but BASF or Sony don't charge creators a royalty for using their products either. If I created a millionaire app for mobiles, why should the likes of Apple/Google/MS have some of the profit too?
  • Jokester
    Bad cheese-eating surrender-monkeys!

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