Spotify France tax: Swedish streaming giant Spotify has announced plans to raise its subscription prices in France following the introduction of a new tax by the government. The tax, aimed at streaming companies, imposes a 1.2 per cent levy on their revenue generated in France to support music creation initiatives.

Despite Spotify's efforts to dissuade the government from implementing the tax, it will now move forward as planned. Consequently, all French users of Spotify will experience an increase in their subscription fees, making them the highest in the European Union. The extent of the price hike will be disclosed by Spotify at a later stage.

Expressing its concerns, Spotify criticised the new tax, arguing that it would not effectively contribute to music creation. Instead, the burden would fall on the listeners, creating an additional intermediary represented by the National Music Centre (CNM) in France.

The tax is expected to generate around €15 million ($16.35 million) in revenue this year, earmarked to support various music industry endeavors, including aiding emerging artists and promoting French talent internationally.

Jean-Philippe Thiellay, the head of CNM, rebuffed Spotify's criticisms, emphasising that the tax would not directly fund CNM operations but would significantly contribute to fostering creativity and diversity within the music sector. He reiterated that 100 per cent of the tax revenue would be reinvested back into the industry.

(With Reuters inputs.)