The Audiovisual Federation and Screen Producers Ireland have both independently submitted reports to the Government as part of a review of the Section 481 film tax incentive scheme with both representative bodies calling for the “crucial” scheme to be extended until 2020.
In separate submissions, both organisations said that the scheme is critical to the growth of the Irish film and television industry and warned of significant job losses; a drop in revenue for the exchequer and “negative knock on effects” to external industries, such as tourism, should the scheme be terminated or restricted.
Both bodies added that there was no evidence to suggest that ending the scheme – which is currently due to expire in 2015 - would be beneficial to the exchequer.
In a submission that included a 66-page independent report by economic consultants Indecon, IBEC-affiliated body the Audiovisual Federation, which is the principal representative body for the audiovisual industry in Ireland, warned that without the scheme many Irish production companies “would not be viable, much of the talent they employ would leave Ireland and the sector would contract by far more than the activity availing of Section 481 incentives.”
Screen Producers Ireland said that “there has never been a more crucial time to maintain Section 481” and added that the industry would “largely cease to exist” without the scheme. In response to arguments for restricting or ending the scheme, SPI said: “It would have the effect of turning off a switch. One moment we would have a vibrant industry and the next it will have been uprooted to other countries where incentives are available.”
Both the Audiovisual Federation and Screen Producers Ireland said that the scheme yields a net benefit to the exchequer. The Indecon report, carried out for the Audiovisual Federation, assessed the net benefit of Section 481 projects only during 2011 and put that benefit at €2.4m while SPI reported the net benefit on the entire sector to be €8.2m for 2011. Their figure was sourced from the IBEC Draft Audiovisual Federation Review 2012.
The detailed submissions from both organisations follow Minister of Finance Michael Noonan’s announcement last May that his department was to begin a public consultation on the future of the tax incentive scheme.
According to Screen Producers Ireland, the Department of Finance’s call for submissions on the matter has yielded 15 such submissions.
The Section 481 film tax incentive scheme was introduced in its current form in 1993. It has been reviewed a total of five times since then. In their submission, SPI noted that all previous reviews acknowledged “that the Section 481 incentive is critical to the continuation of the film and television industry in Ireland”.
For more on Section 481 see here.
