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Opposition Amendment to S481 4/3/99
04 Mar 1999 :
IFTN has learned that FMI (Film Makers Ireland), the representative organisation for Irish Independent film and television producers has persuaded the opposition parties in the Dail to table an amendment to the 1999 Finance Bill. This amendment if passed would extend Section 481 for another 3 years and restore relief to 100%.

FMI are campaigning on this issue at the moment and have targeted film, employment and tourist organisations in constituencies of the all important independent TD's such as Mildred Fox in Wicklow where they have enlisted the help of the Wicklow Film Commission to lobby for her support. Given the slim majority of the Government and it reliance upon independents FMI believes that this is will place pressure upon the Government to implement the recommendations of its Bigger Picture Report released in February when the current review of the industry in Ireland set in motion last by the Minister for Arts, Sile deValera, is acted upon.

It is one of the reports commissioned as part of the review by the Minister which was delivered before Christmas by an Indecon consultant, Mr Alan Gray, which threw the cat among pigeons so to speak as it was critical of the current tax relief system. Since this report there has been growing unease as to which way the Minister would jump and many hoped the finance act would clear the air, but instead it caused more concern as S481 was only extended by 12 months pending the publication of the Report and Recommendations of the Strategic Review Group.

The Minister is expected to receive the report and recommendations of the Strategic Review Group early next month and the Government will use this report as the basis to review existing policies and develop in its own words 'appropriate new strategies to ensure the further growth and diversification of film and television production in Ireland as a viable industry.'

Significantly at the launch of the Screen Commission of Ireland in LA last week the Minister said "If you ask me about the longer term future of Section 481 as an element of Ireland's strategic plan for the industry into the next decade, I consider that it will continue to play a crucial role. I envisage that the scheme will continue to be a critical element of the strategy that will be developed by my Government following consideration of the Report and Recommendations of the Strategic Review Group." But in what form it will be retained is the main concern.

FMI has argued that over the last five years the independent film and television sector has successfully and rapidly grown into a position where it now has the potential to grasp the opportunities of the global market and to become the one of the most vibrant and dynamic industries in the Irish economy. FMI points out that since 1993 employment in the sector has increased by 400% to almost 12,000 people and that IBEC figures have shown an increase in returns to the exchequer every year since 1993.

In December the organisation welcomed the interim report by the Strategic Review Group which strongly recommended the continuation of existing supports, including Section 481. FMI believes Section 481 is the central component in the stability and growth of the film and television industry in Ireland and has helped create an outward looking and internationally aware independent production sector.

In order to provide continuity and stability and to enable Irish producers to compete with the wide range of incentives available in other countries, FMI believes that Section 481 should be reinstated for ten years, that relief on investment should increase from 80% to 100%, and that qualifying expenditure in Ireland and up to 100% should be allowable on budgets up to the six million pounds level.

The aim of the Film Makers Ireland report - The Bigger Picture - was to provide a macroeconomic analysis of the Irish film and tv industry achieved by looking at the industry on three levels. Firstly, to gain altitude by placing the Irish industry in a global context. Secondly, we examine how the industry contributed to the Irish economy now and what degree of potential exists for the future. Thirdly, looking at present financing mechanisms for film production and in particular section 481 and recommending that the incentive be retained and enhanced.

According to the FMI report "if the industry has an Achilles Heel it is in the area of financing. This is because it has not reached a crucial critical mass just yet. In this regards, Section 481 financing is essential to ensure that this infant industry is able to breathe and thus grow. A commitment to a further ten years of Section 481 incentives will facilitate the emergence of strong, well capitalised companies." Given that Section 481 pays for itself, we propose that the tax relief be raised to 100% which would still keep the government in the black. This is necessary to keep investors on board because the attractiveness of Section 481 is diminishing as income tax rates fall.

FMI is certainly prepared to exert every pressure to ensure the retention and extension of Section 481 and is making the Minister fully aware of its feelings on the issue.

Michael McMahon 04/03/99



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