Government opposes EU plan for email and text tax

Proposals would increase costs and damage competitiveness, say industry groups

The Treasury has confirmed it will oppose any attempt by the European Union (EU) to tax emails and mobile phone text messages, after it was revealed that an EU working group is investigating the possibility.

The news was welcomed by IT industry experts who branded the proposals to levy an EU-wide tax of 1.5 cents on each text message and 0.00001 cents on each email as "unworkable", counter-productive", and "stupid".

A European Parliament working group is reviewing the controversial plan, tabled by French MEP Alain Lamassoure. The proposal is part of a series of new tax plans currently under investigation after the recent row over the latest EU budget prompted calls for a change to a way the body is funded. Formal proposals for new taxes are expected by 2009.

Lamassoure argued that such a small tax on the billions of communications that take place each day would be "peanuts" for the people using the technology, but could still raise an "immense income" for the EU.

However, a Treasury spokesman said it would oppose any such tax. "The UK government has made clear that it is opposed to an EU tax and believes that taxation is a matter for member states to determine at a national level," he said. He added that the Treasury had no plans for its own tax on emails and texts.

Nick Kalisperas of IT trade group Intellect welcomed the government's position, adding that such a tax would not only be extremely difficult to collect, but would damage the EU economy by discouraging the use of technology.

"New technologies should not be used as a convenient get out route for governments looking to raise taxes," Kalisperas said. "The EU can't talk about innovation one minute and then seriously consider a proposal like this the next. I would hope that in the cold light of day they will realise it would be counter-productive."