SNP MEP Ian Hudghton has made a plea
to the European Commission to extend tax relief for the games industry,
describing as “alarming” recent reports that temporary concessions granted in 2007
are about to end. Mr Hudghton’s call comes in the wake of TIGA’s recent
bid to have tax breaks for the industry included in the UK Government’s
Without these concessions, the MEP
argues, games companies are liable to shift production out of the EU to
countries such as Canada and South Korea with the loss of high quality jobs.
Although Scotland does not currently have the benefit of these tax allowances,
those involved in the industry, with the support of the Scottish Government, are
continuing to fight for it to be implemented here.
The MEP, who shares an office in
Dundee with Joe FitzPatrick MSP, Chair of the Scottish Parliament’s Cross Party
Group on Video Games Technology, has written to Wouter Pieke of the European
Commission’s Competition Directorate-General appealing for the current tax
breaks to be extended past their 2012 deadline to give Scotland a chance to
benefit from the competitive advantage they afford.
Writing to Mr Pieke, Mr Hudghton said:
“I have been alarmed by recent reports
that the European Commission is considering halting tax relief on the games
industry in the EU. This would have a devastating impact on the many companies
which have been established here in Scotland and which are providing high quality
jobs at a time of severe economic challenges.
“Although Scotland does not currently
benefit from these tax breaks, the games industry with the support of the
Scottish Government is currently arguing the case for Westminster to introduce
tax relief to ensure that this industry can compete in the global market.
“Whilst I appreciate that the initial
tax breaks were introduced on a temporary basis, experience shows that, without
these incentives, companies will simply take their production elsewhere, out of
the EU to Canada, South Korea and so on.
“I’m sure you will agree with me that
we should be doing all we can during these tough financial times to ensure that
the EU remains competitive in the global games industry market. Removal
of the current tax relief on the games industry in the EU would be a step in
the wrong direction and I would urge you to consider the consequences this
would have not just on the companies which are based in my constituency but in
the wider EU context.”
Welcoming Mr Hudghton’s intervention,
Joe FitzPatrick MSP said:
“The Westminster government’s failure
to intervene and create a level playing field for our firms shows a complete
lack of imagination.
“TIGA’s proposed Games Tax Relief
would more than pay for itself. Over five years, it is estimated that a
relatively modest £96 million tax relief would help to generate almost £200
million investment in the sector and £172 million in new and protected tax
receipts to HM Treasury. In addition, it would secure almost 5,000 jobs.
“The Chancellor repeatedly stresses
the need to support export-oriented, highly skilled, low carbon businesses, yet
when the time comes to put his money where his mouth is he falls far short of
“With growth in the economy floundering,
the Chancellor needs to take decisive action in his forthcoming budget to
support growth in this sector. Responsibility for doing so falls squarely on
his shoulders, as only he has the necessary tax powers to do so.”
The inaugural meeting of the Cross
Party Group on Video Games Technology at the Scottish Parliament will take
place on Thursday 8th March 2012 at 5.30pm in Committee Room 5. The
Cabinet Secretary for Finance and Sustainable Growth has confirmed that he will
be in attendance.
The group is open to all those with an interest in the
industry, particularly policymakers, developers as well as those involved in
education and training. Please direct all enquiries to email@example.com
or call 01382 903212.