"...Chancellor Gerhard Schroeder on Monday ruled out a tax on Internet use that critics said would stifle the development of the Web in Germany, Europe's biggest economy. In a speech to business leaders, Schroeder quashed a new Finance Ministry rule floated last month to tax businesses every time employees use company computers for private Internet surfing.

Telecommunications and computer firms had criticized the government for the tax plan, arguing that it would be a bureaucratic nightmare that would discourage many people from becoming familiar with the Internet. Still, the government will push ahead with new rules to protect intellectual property rights, Schroeder said.

Many companies are upset with plans to levy a tax on the makers of equipment such as high-speed modems and CD-burners that can be used to copy protected material. The proceeds would go to rights holders such as pop stars and authors..."