Unfortunately, the announcement made today in relation to the Section 481 film tax credit is very disappointing.
Ireland is at risk of losing a unique opportunity to grow a strong and dominant film and television production industry. Although we have a very attractive film tax break paying 32% of all production expenditure incurred in Ireland. Government keep failing to pay proper attention to the opportunity that presents itself i.e. to grow a strong indigenous industry on the back of inward investment from the US in this sector.
Large US based film and television production companies and studios have consistently advised that they will locate large productions in Ireland if more studio space is built here and if we remove the current cap per project - which was instead increased from €50m to €70m today.
By not removing the cap today, we are potentially saying no to that opportunity. The €50m cap was high enough to make the production of high end TV attractive here but too low to attract large studio feature films.
There are relatively few TV series or feature films produced in the €50m to €70m cost range. So today’s change will have very limited impact and will ensure the ongoing trend of large studio films being shot in the UK rather than here. There is no cap imposed in the UK. Recently commissioned reports have confirmed that there is concrete evidence that the UK tax credit is a net contributor to the UK economy and that their strategy to grow the indigenous industry by attracting US studios to the UK is working.
Government’s failure to grasp this opportunity to drive job creation and knock on tourism benefits can be principally to blame on a flawed cost/benefit methodology being used by the department of finance and a lack of strategic vision for the Media and Entertainment sector.