Japan to Junk Pod Tax

July 10, 2008 8:51 a.m. EST

Tokyo, Japan (AHN) - Japan has decided to junk plans for an 'iPod tax,' an unpopular idea designed to reward recording companies for the revenue lost to digital music players.

The proposed fee of between 1 percent to 3 percent on top of the price of digital music devices would go to recording companies hurt by music sales lost to such gadgets. Opponents of the plan, including electronics manufacturers and consumers, called the plan being pushed by the Agency of Cultural Affairs as outdated and unfair.

The decision to withdraw the tax followed the inability of the Japanese government and electronics companies to reach a compromise. In 2005, the proposal was also shot down.

Japan's government said the proposed fee follows a similar tax in place in Europe.