German Industry Fights TV Tax on PCs

BERLIN (08/09/2000) - German businesses are weighing in against a proposal to slap a tax on multimedia-capable PCs. The Union of German Industry (Bundesverband der Deutschen Industrie eV, or BDI), an umbrella group for industry associations, said Tuesday that broadcast fees would be "counterproductive."Germany's public television and radio networks are funded through a system of fees imposed on TV and radio receivers. Finance Minister Hans Eichel was quoted in local media Sunday as saying that broadcast fees should take into account the growing number of users who receive TV and radio programs over the Internet.

The BDI responded that in view of the conversion of telecommunications, IT, and "classical" media, the old system of financing broadcasts is ripe for reform.

"We think that taxation is not good for the diffusion of new media," said BDI Assistant Director Niels Lau. "We promote the idea to give everybody the chance to go to the Net; our problem is that the government says everybody has to use the Net for economic reasons, and the government (doesn't give users) the chance to go to the Net without taxation."Currently, every household is supposed to pay 28.25 marks (US$13.02) monthly for each TV set, and 9.45 marks for each radio receiver. According to the broadcast tax authority, the fees are "temporarily" suspended, through the end of 2003, for PCs with Internet access. The agency warns, however, that PCs outfitted with a "TV/radio card" are considered to be broadcast receivers for tax purposes.

The German situation is more complicated from that in other countries with broadcast fees, like Canada and the U.K., said Lau, because in Germany, the federal government regulates e-mail and other uses of the Internet, while state governments collect the broadcast taxes. As different media technologies converge, he said, there needs to be a central authority. The fees also need to be harmonized on a European level, he added. "The European Commission is thinking about that too," said Lau.

German PC makers are already fighting another tax proposal. A group representing authors and artists demanded last month that PCs be subject to Germany's intellectual-property tax, which is imposed on recording and copying devices. The fee is meant to compensate creators of works which are privately duplicated without permission.

The BDI, in Berlin, can be reached at +49-30-2028-0 or online at http://www.bdi-online.de/.

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