Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

239. To ask the Minister for Finance the estimated cost of restoring the regional uplift of 5% to the film tax credit. [24744/23]

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Section 481 provides relief in the form of a corporation tax credit related to the cost of production of certain films. The scheme is intended to act as a stimulus to the creation of an indigenous film industry in the State, creating quality employment opportunities and supporting the expression of the Irish culture.

Finance Act 2018 introduced a short-term, tapered regional uplift for productions being made in areas designated under the State aid regional guidelines. The purpose of the regional uplift is to support the development of new, local pools of talent in areas outside the current main production hubs, to support the geographic spread of the audio-visual sector.

The uplift originally provided an increased level of credit for four years, with 5% available in years 1 and 2 (2019 and 2020), 3% available in year 3 (2021), 2% available in year 4 (2022). However, in recognition of the detrimental impact the COVID-19 crisis had on the audio-visual sector, Finance Act 2020 amended the regional uplift to provide for an additional 5% year in 2021, in effect to replace the incentive year lost as a result of the COVID-related public health measures. The tapered withdrawal of the uplift then restarted, reducing to 3% 2022, 2% in 2023, and it will be Nil thereafter.

As both the main 32% credit and the regional uplift are approved State aids, any further extension of the uplift would require approval from the European Commission. In addition, it should be noted that a further extension of the Uplift in its current form may not be possible. While not a Regional Aid, the current relief operates by reference to the regional aid map applicable at the time it was introduced. A new regional aid map, covering a smaller geographic area, was introduced from April 2021 and, while approval was granted by the European Commission for the uplift to continue to reference the previous map for its remaining term, it is not clear that a similar approval would be granted for a longer extension.

With regard to the potential cost of an extension, the Exchequer cost of the regional uplift is dependent on the number of qualifying films, as well as the timing and value of claims made for the relief in future. Therefore it is not possible to provide an accurate forecast of potential future costs. However, it may be of assistance to the Deputy to note that, based on information outlined in the Cost Benefit Analysis of Section 481, published on Budget Day 2022, the estimated cost of the regional uplift in 2020 and 2021 was €5.9 million and €4.7 million respectively, both being years in which a 5% uplift was available. The Cost Benefit Analysis is available at www.gov.ie/en/publication/ccc22-budget-2023-taxation-measures/.

I would note that the main film tax credit of 32% will remain available to qualifying productions in all areas of the country following the winding-down of the uplift. Furthermore, other non-tax supports are also available to regional productions, such as Screen Ireland's fund to support regional activity. The Regional Support Fund is designed to support the development of skills around the country, outside of the established hubs in Dublin and Wicklow. It is targeted at crew across all grades, including new entrants, and will also require commitments in the area of Diversity and Inclusion, sustainable production and on-set initiatives.