A report commissioned by France's culture ministry and written by record producer Patrick Zelnik has proposed a plan on taxing online advertising as well as Internet providers. The resulting funds would be used to fund the creative sectors which are having a tough time keeping up with the digital times, which is the case with the music industry. 

Such a move could make up to 50 million euro in this year alone, and the author of the report says the tax would only take a small percentage of Google’s ad revenues. Furthermore, the report argues that making money by advertising and not being taxed is “endless enrichment without payback”. The plan is dubbed “Google tax” but it is not excluded that it could be soon subjecting other big names like Microsoft, Yahoo, Facebook, etc.

The French president, Nicolas Sarkozy didn’t comment on the “Google tax” but he did say that big players advertising in France and not paying tax goes a long way towards distorting competition.

Google France on the other hand isn’t so happy about the move as they were hoping for innovation rather than tax. Google’s representative said:”There is an opportunity here to promote innovative solutions, rather than extending the attitude of opposition between the Internet world and the cultural world, for example through the approach of taxation." Well, they’d say that wouldn’t they.

More here.