The digital industry wants the much-debated proposed tax on connected devices to take account of the CNN’s opinion

Pending publication of its opinion, the CNNum revealed in early July the content of the debates and consultations held, which unanimously point to the risks of a national tax solution: “None of the stakeholders is in favor of adopting a national sectoral tax”. All participants reaffirmed the imperative of relying on the international negotiations underway at the OECD, which published its roadmap last week, to enable countries to combat the erosion of their tax bases.

The content of the published debates demonstrates the limits and counterproductive effects of each of the numerous proposals that have fuelled public debate in recent years, whether it be the tax on online advertising, the tax on the purchase of e-commerce services (TASCOé), the extension of the obsolete and opaque private copy levy system to Cloud Computing, the tax on bandwidth, or the tax on personal data. They all threaten to penalize France’s most innovative players, in other words, the growth and jobs of today and tomorrow.

Lescure Tax: an anachronistic and ineffective tax

Logically, the tax on connected devices, recently proposed by the Lescure Report but strongly criticized by participants in the CNN debates, should also be abandoned. Far from being “painless”, as the Ministry of Culture would have us believe, this tax, which is supposed to take over from the highly contested private copy levy, would be tantamount to directly taxing digital use when it should be promoting it…“. It’s dangerous to play with communicating vessels, when consumers and distributors are already making significant contributions to the financing of culture,” pointed out the participants in the debates. It is indeed paradoxical, to say the least, to wish to set up systems whose primary consequence will be to oppose the widest possible distribution of digital equipment and services.

Let’s not forget that new uses are both the driving force behind the democratization of cultural content, particularly among the younger generations, and the main lever for business competitiveness, which depends entirely on digitalization.

The principle of such a tax is based on the abusive idea that digital players are capturing value, despite the fact that they are at the origin of an unprecedented and democratic distribution of cultural content, a sine qua non condition for the valorization of this content. The conclusions of Booz&Co’s report on the “Digital future of the cultural industries in France” are perfectly clear: “Digital media are the driving force behind all the growth recorded by the cultural industries in Europe (30 billion euros in additional revenues in 2011 compared to 2001)”, which amounts to saying that “the entire 30 billion euro increase in revenues (7 billion euros in France) can be attributed to digital over the last 10 years”.

It is therefore crucial to maintain a level of taxation that does not undermine the development of digital uses. As the French Minister for the Digital Economy, Fleur Pellerin, has said, “Let’s not always think in terms of taxes.” There are relevant alternatives, for example in the field of competition law or in the establishment of new contractual relationships.

Because digital technology is becoming much more than a sector in its own right, through its ever-increasing contribution to the digitization of other industrial and service sectors, the representatives of France’s digital industry recommend that, as a matter of course, all new tax measures should also be assessed by Parliament, in terms of their yield, the base of those liable to pay them and their tax base, in the light of their impact on the entire economy that is now benefiting from digital technology.