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Tiga Wants G20 Tax Comparison

Rob Crossley's picture

By Rob Crossley

April 3, 2009

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UK games industry group Tiga has called on Brown’s government to measure the effectiveness of its tax incentive schemes against other G20 nations.

The G20 represents the consortium of leading nations across the globe. The group consists of presidents, chancellors and prime ministers from the likes of North America, China, India, Canada and the UK.

Yesterday members of the group convened in London to decide on global measures to tackle the recession, yet Tiga CEO Richard Wilson believes that the UK should also be using the G20 as a means to compare its tax policies and keep them competitive.

“The Government needs to benchmark the effectiveness of the UK’s overall tax system in terms of, for example, promoting business growth, investment and job creation in comparison to those that operate in the G-20,” he said.

“If the Government is serious about supporting innovation in businesses then it must measure the effectiveness of tax incentives, such as the R&D tax credit, that are available to the video games industry in the UK compared to those of other countries. The UK tax system does not operate in a vacuum.”

Tiga is seeking fast action from the UK government as the nation’s games industry workforce shrinks, as one third of British developers admit to having problems with the tax burden, and as the entire development sector is in danger of falling to fifth in global rankings.

“Governments around the world are competing to establish favourable tax regimes in order to attract businesses to their jurisdictions and to promote economic growth,” added Wilson.

“Unless the Government compares the impact of its tax measures in relation to those of other countries, it will be impossible to tell whether it is assisting particular economic sectors as well as it could do.”

Rob_Jackson's picture

we are in the worst depression since the 1930's and these guys want 'tax breaks'. Meanwhile back on earth the residents of the UK are facing the prospect of heading toward malnutrition for the first time since the victorian era because of food price hikes followed by income drops. The video game industry is nearing the end of its fourth decade, if it cannot stand on its own feet by now, let it move to canada. The uk consumer will not notice any change in game titles for sale.

asym's picture

TIGA is not asking for a tax break to help a pre-competitive industry grow. As you say, games are past that. What they are asking for is parity between the UK's tax regime and those of countries like Canada, the lack of which is forcing UK developers to suffer an unnatural competitive disadvantage. This is a completely reasonable request.

Even if parity were achieved by tax breaks in the UK (an alternative would be to reach an agreement with other countries to standardise taxes at a higher rate) that is not the same thing as reduced tax income to the Government. Lower tax rates can increase the total tax take if they preserve enhance the competitiveness of an industry - for instance, a 10% cut of a successful industry's £100 value generates more income than a 15% cut of a less successful industry's £50 value. If many developers are in danger of moving to Canada due to the more favourable tax regime there, reducing taxes could increase tax take as well as safeguarding jobs in the UK.

The current economic situation (which you nonetheless blow out of all proportion) is surely an argument not for the UK Government to continue to ignore games, but to try to capitalise on the financial success of an industry which stubbornly continues to grow and in which the UK has historically had a strong competitive advantage.

ArronC07's picture

Yay... Go short sightedness!!