A European Union copyright tax on MP3 players and blank CDs to compensate authors generates benefits and needs only tweaking rather than fundamental reform, a report for an industry body said Thursday.
EU Internal Market Commissioner Charlie McCreevy was forced to abandon his proposal to reform the levy that varies enormously across the 20 EU states that apply it. Britain and Ireland have no levy at all.
The tax at import level is often passed on to consumers. It raised 560 million euros ($819.7 million) in 2005.
Last year's retreat came after Dominique de Villepin, then the French prime minister, intervened to say McCreevy's initiative would threaten Europe's cultural heritage.
Some of the cash raised goes to national coffers to fund cultural activities in states like France and Finland.
Top electronics firms like Royal Philips Electronics were angered, but national collecting societies that pass the tax on to authors and artists were jubilant.
GESAC, which represents the national collecting societies, unveiled a report on Thursday which it said rebuffed arguments used by the electronics industry for drastic reform.
"We don't want any more emotional debate. We want a concrete discussion and concrete proposals," Veronique Desbrosses, secretary general of GESAC, or the European Grouping of Societies of Authors and Composers, told reporters.
"We know the Commission is still willing to address the issue," she added.
The report debunked two key arguments of the electronics industry: 1) that differences in tax rates among EU states severely distorted the internal market and 2) that digital rights management, or DRM, does away with the need for the tax, she said.
The report by Econlaw, a consultancy, found modest negative short-term effects but also longer-term benefits, such as giving incentives to create new content and freedom for consumers to use copyright material in many ways.
It estimated that the cash raised was equivalent to 5 percent of sales of consumer electronics products in the EU.
The tax was introduced in the 1960s on blank tapes, but it has been extended to many types of gadgets, such as printers.
"The system may require some minor adjustments to make it more easily administrable," the report concluded.
GESAC put forward several proposals to reform the copyright tax system to crack down on avoidance of payment by importers:
• Cooperation of customs and value-added sales tax authorities.
• Extension of liability for nonpayment by importers or manufacturers to outlets such as retailers and distributors.
• Clarification of rules on distance selling to ensure that sellers are subject to payment, never consumers.
The tax was due to be included in a paper on online content due from EU Media Commissioner Viviane Reding, but Debrosses said this element has been ditched due to a "battle of competences" between Reding and McCreevy.
Sources told Reuters last month McCreevy told some electronics industry officials that it would do no harm to "have another blast" at reforming the tax.
McCreevy's reform did not want to abolish the levy but rather make its calculation and distribution more transparent.
The electronics industry has said not all the cash collected ends up in the hands of authors, but Desbrosses said this was unfounded rumor.
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