France Will Tax Smartphones To Support Culture

France technology © Shutterstock

Across the channel the government is mulling a new tax on smartphones and tablets to protect French culture

The French President Francois Hollande is considering introducing a new tax on technology in an attempt to protect French culture.

The tax, starting at 1 percent and rising to as much as 4 percent, could be levied on the sales of new tablets, smartphones and laptops. The money raised – thought to be in the region of 86m euros or £73m per year – would be used to support and protect French music, film, and the arts.

Aurelie Filippetti France minister of Culture Technology Tax

The idea is currently being considered by the French President and aims to bolster France’s infamous “cultural exception” or “l’exception culturelle”, which was established in 1992 to safeguard the cultural heritage of France against market forces and foreign competition.

This “cultural exception” is enshrined in French law, and treats goods and services that are deemed “culturally significant” differently than other traded goods and services. In essence, the concept is designed to guard against the global domination of the English language and American films. For example, 40 percent of music played on French radio has to be in the French language.

The United States in particular has long argued that the cultural exception is a form of protectionism that harms global trade. But now France is considering extending this law in a tax on new technologies.

President Francois Hollande was presented with the idea by Aurélie Filippetti, Minister of Culture and Communication (above) on Monday. The report was funded by the French government and the team that wrote the report was led by the former CEO of French pay-TV channel Canal Plus, Pierre Lescure. The committee spent nine months examining ways to strengthen the “cultural exception” in the face of growing digital content.

“The cultural exception is a battle for France and defending and adapting also contributes to growth and employment,” Aurélie Filippetti was quoted as saying by the Guardian after handing the report to Hollande.

The French minister argued that smartphone and tablet manufacturers should pay in an “absolutely minimal way … part of the proceeds of their sales in favour of the creators”.

“Today we have tablets, 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,” she was quoted as saying.

The newspaper revealed that in 2012 French consumers had bought 13.5m smartphones, 3.6m tablets and 4.5m laptop computers.

It is understood that the French study has also proposed a total of 80 measures in order to protect French national heritage.

Another proposal in the 719-page report is said to include the relaxing the financial penalties for illegal pirating of videos and music. It advises reducing the fine from €1,500 (£1,268) to €60 (£42), a move sure to annoy Hollywood studios and record companies.

Protectionist Move

French lawmakers will reportedly study the document over the summer, with a strong likelihood that the cultural tax would be drafted into the French budget later in the year.

This move comes after it was revealed earlier this month that the French government had blocked the acquisition of a French company by the American firm Yahoo.

Yahoo had been seeking to acquire French video-sharing website Dailymotion, currently owned by French Telecom through its Orange mobile operator subsidiary. But the deal was blocked when France’s industry minister Arnaud Montebourg put a stop to it, saying that the US group wanted to “devour” its smaller competitor. The French government is still a shareholder in France Telecom.

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