Film industry welcomes extension of Section 481

Film Film industry representatives have enthusiastically welcomed Mr McCreevy's extension of Section 481 tax relief for investment in film production, which was due to end in December 2004. The scheme has been extended to the end of December 2008.

"This is a good result," said Mr James Flynn of the industry group Screen Producers Ireland (SPI), which represents over 220 independent film and television companies, and has campaigned strongly for the retention of Section 481.

"We're very pleased that the Government has shown its understanding of the strong cultural and economic arguments that were made."

Film-makers had argued that the ending of Section 481 would have catastrophic implications for the audiovisual industry, which employs over 4,000 people, and had predicted that production levels would fall by up to 80 per cent in the absence of the relief. SPI also welcomed the announcement that the cap on the maximum amount of funding eligible for tax relief in respect of any one film will be raised, from the current level of 10.48 million to 15 million from January 1st, 2005.

"It recognises the benefit to the country of larger-scale films being attracted here," said Mr Flynn. The increase is subject to approval by the European Commission.

The need for new legislative provisions to curb abuses of the relief will be examined in the context of the 2004 Finance Bill.

A senior official at the Revenue Commissioners told the Oireachtas Joint Committee on Finance and the Public Service last month that an audit of Section 481 had uncovered 30 cases that did not comply with the law, involving up to €23 million in uncollected taxes.

"We subsequently asked for more detail on those figures," said Mr Flynn.

"It showed that 94 per cent of investments were tax-compliant, and that of the €23 million which was not compliant, €20 million was before 1997, when the current certification system was established. But, as far as SPI is concerned, any sort of abuse is completely unacceptable."

In a statement issued following Mr McCreevy's announcement, SPI said that "it is an important day for Ireland internationally, as there has been great uncertainty for a number of international productions considering Ireland as a potential production location. We are delighted that we now can reaffirm Ireland's place as an international location of choice for filming."

Asked whether Ireland had already lost any large-scale productions because of the uncertainty over the future of Section 481, Mr Flynn said that none "had been completely lost", but that some had certainly been put on hold pending the decision.

The extension of the scheme was also welcomed by Mr Ossie Kilkenny, chairman of the Irish Film Board, the State agency charged with supporting film production.

"The film board joins the industry in welcoming this affirmation of the Government's commitment to the growth of the Irish film industry," said Mr Kilkenny.

"It is all the more welcome in a year when the investment by the Government is bringing its rewards, with an unprecedented output of successful films made in Ireland. The announcement will help to maintain confidence and promote Ireland as a location for film-making.

"We should take the opportunity to capitalise on the industry's momentum."