Tiga demands games tax break in next week's Budget

Tiga demands games tax break in next week's Budget
Michael French

By Michael French

March 7th 2008 at 1:52PM

First public comment from new CEO Richard Wilson is a warning to UK Government

Tiga has called on the UK government demanding it introduce a tax break and 'create a fair competitive environment' for games developers in next week's yearly budget by Chancellor Alastair Darling.

The statement is another warning to the Government from the UK trade association about the adverse impact tax breaks in regions such as Quebec, Canada are having on the UK's game developers.

It's also the first official comment from newly appointed CEO Richard Wilson. His words follows SCi's recent decision to move its production services from London to Montreal as part of its commercial restructuring, citing Quebec’s heavily government subsidised and lower-cost games industry as a key motivating factor.

"UK games developers can compete successfully against games developers all over the world where market conditions are fair. The UK is the fourth largest developer of games in the world in terms of revenue generation. Games developers contribute 30 per cent of the country’s media exports. However, Canadian government subsidies for games developers mean that the playing field is increasingly tipped against UK based games developers," said Wilson.

Despite mounting pressure from vocal parts of the games industry, and a UKTI report pointing out that Canada has boomed as a development region due to its governement's support, the Government has refused to commit on the issue, merely saying it may challenge Canada's financial incentives with the World Trade Organisation.

Added Wilson: "UK games developers want to compete in a fair global market. The UK Government should make it a priority to determine whether the incentives offered by Canada to video games developers violate World Trade rules. If they do, as seems likely, the Government must take action via the World Trade Organisation against Canada at the earliest opportunity.

“However, a WTO ruling on the issue could take years to reach and UK games developers are losing jobs now. The Government should therefore introduce tax breaks for game production in the UK in order to level the playing field against unfair competition. We need this measure as soon as possible - an announcement by Alistair Darling, the Chancellor of the Exchequer, in his Budget on March 12th would be ideal."