Thought for the day:When is a tax not a tax?

Hard-hitting IT columnist Simon Moores gives his personal take on the hot issue of the day.Yesterday I discussed how the UK...

Hard-hitting IT columnist Simon Moores gives his personal take on the hot issue of the day.Yesterday I discussed how the UK economic downturn is deepening. This could have consequences for the Government's corporation tax revenues if more people lose their jobs.

Meanwhile, the Government, with the help of the BBC, appears to be trying to balance the predicted shortfall in tax revenues by raising the television licence to £112. "It's a tax," agreed the nice young lady in TV licensing when I protested.

You may remember that following Jonathan Miller's well-publicised struggle against the licence fee as a violation of his human rights, I asked how it's possible to reconcile watching television on a PC with the law as it stands. One of our readers, law lecturer Lindsay Stirton, who saw my earlier Thought for the day ( "Use TV licence fee for better broadband"), is challenging his students to determine whether the BBC's Newsnight is still a television programme when it is streamed on RealMedia.

Turning the argument around on its head and with a million people now allegedly using broadband Internet access, perhaps the Government should simply scrap the Eastenders tax and consider taxing Internet access instead. This isn't as crazy as it sounds. After all, I have two TV licences and have to own a radio licence for my small aircraft.

I would like to think that public protest and common sense will prevail over the continued existence of the television licence and that by then at least 60% of the UK population will be on the World Wide Web.

Stirton comments: "What is interesting is the claim that 'it's a tax' may be significant, because in UK constitutional theory only Parliament [and not the Minister for Culture, Media and Sport nor the BBC] can levy taxes. There is a legal difference between taxes and charges. But the more the regulations broaden the definition of 'television receiving equipment' to include internet-enabled PCs, the more it starts to look like a tax in the constitutional sense.

"Complicating the matter further, there is a category known as a 'revenue claim' which is broader than a tax. Revenue claims of one state are not enforceable within another state. Could this be why the BBC only requires UK-based surfers to get a TV licence to watch Paxman with RealPlayer".

For all the generous political talk of a digital Britain and a wired society, there's a huge cost involved to the Treasury in achieving the changes that now surround us. Historically, new inventions are taxed, directly or indirectly when they achieve a critical mass, so why should the Internet be any different? After all, if of all the nations on earth, we need a licence to watch Tom & Jerry, why shouldn't this form of extortion be extended to the PC, which can also double as a receiver?

Maybe they have thought about it but they aren't ready to share their conclusions with us quite yet.

What is your view?
Apart from a direct tax, what other ways could the Government fund UK Internet growth? Tell us in an e-mail >> reserves the right to edit and publish answers on the Web site. Please state if your answer is not for publication.

Zentelligence Setting the world to rights with the collected thoughts and opinions of the futurist writer, broadcaster and Computer Weekly columnist Simon Moores.

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