Japan Scraps Controversial 'iPod Tax' Plans

by Mary Swire, Tax-News.com, Hong Kong

11 July 2008

It emerged on Thursday that the Japanese authorities have been forced to drop, for the moment at least, a plan to impose a so-called 'iPod tax' in order to compensate record companies and recording artists for home duplication of their products.

Although older technology, such as DVD recorders and minidisk players are already subject to a copyright levy, the newer wave of portable digital products are not, and an attempt to impose such a tax in 2005 was unsuccessful.

In May of this year, the Agency of Cultural Affairs announced that it intended to submit legislation earmarking 1-3% of the price of portable digital music devices and hard drive recorders for artists and record companies.

However, the move was strongly opposed by manufacturers of such devices, who argued that that they would be forced to absorb the tax hit, rather than pass it on to the end consumer.

Speaking to the Associated Press on Thursday, Agency for Cultural Affairs Official, Masafumi Kiyota admitted that despite the fact that the proposal will remain on the table:

"At this point, there is virtually no hope for getting the legislation passed."

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