TAX NEWS - June 2010

France Mulls Fibre Optic Tax

In charge of broadband deployment in France, Hervé Maurey has confirmed that the introduction of a new tax, levied on either businesses or consumers in France, may well be unavoidable.

Championed by French President Nicolas Sarkozy back in February, the government's digital project aims to provide broadband access to every household in France by 2025, costing in the region of EUR30bn.

French Secretary of State for the Digital Economy Nathalie Kosciusko-Morizet announced, during a recent conference, her aim to mobilize around EUR7bn over a period of four or five years from 2011. While EUR2bn is due to be provided from the government's loan (le grand emprunt) and EUR100m a year from the European fund, an obvious – and significant – shortfall remains.

Tasked with drafting a report on the financing of the government's broadband project, Hervé Maurey has warned that a new tax may be unavoidable, emphasizing the need to find a levy with the largest possible base in order to keep the rate as low as possible.

The latest revelations have provoked outrage among operators, still reeling from the introduction of an audiovisual tax in France. Groups have argued that such a move would not serve to boost the development of the project, but merely serve to reduce the investment capacity of operators.

A first draft is due to be presented to Prime Minister François Fillon in June.