PARIS, March 7 (Reuters) - Swedish streaming service

Spotify ( SPOT ) on Thursday said it would increase its prices

in France due to a new tax, which it argued would fail to

accomplish its intended goal.

The government last year decided, starting form this year,

to slap a 1.2% tax on the revenue streaming companies make in

France to help finance music creation.

"While Spotify ( SPOT ) worked very hard to encourage the government

to avoid adding this tax, unfortunately they decided to move

forward," the Swedish group said in a statement.

"To put it bluntly, all French users will see their

subscription plan fee go up. French users will now pay the

highest subscriptions across the European Union."

It said it would announce the extent of the price increase

at a later stage.

In its statement, Spotify ( SPOT ) said the tax was misguided and

would not help music creation.

"It will simply come at the expense of listeners and create

an additional middleman: the CNM," it said, referring to

France's National Music Centre.

The tax, which the government hopes will raise about 15

million euros ($16.35 million) this year, will contribute to

CNM's support for the music industry, including helping emerging

artists and French artists trying to break through abroad, the

government has said.

The head of the CNM, Jean-Philippe Thiellay, has rejected

Spotify's ( SPOT ) criticism.

The tax "will not finance the CNM, whose operations are

ensured by the state, but it will finance creation and

diversity," he told France Musique radio in an interview last

year. "100% of this tax will be re-injected into the sector."

($1 = 0.9173 euros)

(Writing by Ingrid Melander

Editing by Tomasz Janowski)