'PC tax' scrapped as French minister makes U-turn

Prime Minister Lionel Jospin and Finance Minister Laurent Fabius denounced Tasca's planned tax late yesterday, leaving the minister no option but to abandon her plans.

Speaking in the National Assembly, Tasca said: "The government does not tax computers and has no intention to do so."

Tasca's comments earlier in the day had provoked a stream of opposition from the IT industry. Hewlett Packard and Fujitsu Siemens France called the proposals 'stupid' and vowed to fight them.

In an interview with Inter Radio Finance, Fabius said the government has no intention of "creating taxes on every street corner", at a time when it is trying to promote technology.

Tasca PC tax was intended as a way of compensating artists for loss of intellectual property through online piracy. She admitted that she is now considering other ways of achieving the same end.

Meanwhile, the current French tax on audio and video tapes will be extended later this month to include CDs, DVDs and mini discs. The majority of the money raised will go directly to the artists and film producers but a quarter will be used to encourage new talent.

Last year the artist tax raised FFr450m (£43m) for the government - a drop of FFr300m (£29m) since it was introduced in 1994.