New Swiss iPod Tax

Manufacturers and distributors of MP3 players have challenged the introduction of a new tax in Switzerland. The new tax applies to digital music players, and it is due to come into force on the 1st of March.

The manufacturers and distributors have written the Federal Court asking for a postponement so that they may get the change to contest the new tariffs for authors' rights, which, according to them are "astronomically high." The decision to introduce the new tax was taken on January 17, by a federal arbitration commission, responding to a demand by a group of collecting societies including Suisa, the organization responsible for administering music rights. However, the tariffs were only announced last week, fact that led to the uproar.

At the head of the protests is the Swiss Association for Information, Communications and Organization Technology (Swico), which has asked for a delay of 60 so that they may prepare their case. Swico members include Apple, IBM and Sony.
Swico is also unhappy about the 'discrimination' between the different types of devices. The tax on a four-gigabyte MP3 player with flash memory will be almost SFr19 ($15), while that on a four-gigabyte iPod will be around SFr2. A 400-gigabyte DVD recorder will incur an extra SFr138 charge.

"The manufacturers certainly can't cover this. With the margins they have today, they cannot absorb the extra cost," said Swico President Jürg Stutz, adding that the tax could lead to price rises of up to 20 per cent on certain items.

At the moment, consumers are already paying for authors' rights through a levy when they download music from the Internet and another one when they buy a blank CD. This new tax would mean the consumer has to pay three times.

Rudolf Strahm, the federal price regulator, made it clear in a recent interview with Le Temps newspaper that he too is unhappy with the situation.