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France weighing 'culture tax' on phones, slabs, PCs, TVs

'It's necessary to close loopholes to restore fairness'

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The Socialist government of France is mulling a new "culture tax" to be levied on smartphones and other consumer electronics as one possible measure to help fund music, film, and the arts in a rapidly changing media landscape.

Last fall, French president Francois Hollande created a special panel, chaired by former Canal+ CEO Pierre Lescure and tasked with investigating ways to increase funding for arts and culture in the digital age. It released its findings in a 700-page report on Monday, The Wall Street Journal reports.

Traditionally, industries such as films, music, and books have been supported in France by taxes attached to TV advertising, pay-TV fees, and movie-ticket sales, to give a few examples. In 2012, such taxes underwrote the arts to the tune of €749m ($972m/£635m).

But as ever more consumers view content through alternative channels such as Apple's iTunes Store and various streaming-media services, French lawmakers fear that funding for the arts may be waning.

Revenue from TV ads is shrinking, the Lescure report claims, and French film producers only spent €1.07bn ($1.39bn/£905m) in 2012, down from €1.13bn ($1.47bn/£956m) a year earlier.

"Some players in the digital universe profit from cinematic and audiovisual works, but don't contribute to their financing," the report states. "It's necessary to close fiscal loopholes to restore fairness."

One of the panel's proposals is to create a new 1 per cent tax to be levied on all smartphones, computers, TV sets, videogame consoles, e-readers, and other content-consumption devices.

That new tax would replace an existing one currently levied against recordable media, including blank CD-R and DVD-R discs, memory sticks, and hard drives, and could raise an additional €86m ($112m/£73m) per year, the report claims.

Lescure's panel also recommended scrapping Hadopi, a controversial anti-piracy agency that has sent more than a million threatening emails to suspected French freetards, to little effect. The group reportedly costs millions to run, yet so far has led to exactly one piracy conviction, for a fine of €150 ($195/£127).

Instead, France should relax its draconian "three strikes" piracy law and refocus its anti-piracy activities on organized groups that bootleg media for financial gain, rather than individuals, the Lescure report states.

The report itself carries no legal weight and is intended only to advise Hollande and other politicians of their options. Reuters reports that Hollande is now weighing the material and plans to decide what legal steps to take by the end of July. ®

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