Dáil Éireann Debate, Wednesday - 18 September 2024
174. Deputy Mairéad Farrell asked the Minister for Finance his plans to address in the Budget the lack of targeted regional supports for the film industry, particularly in light of the demise of the Section 481 regional uplift; and if he will make a statement on the matter. [36332/24]
View answer198. Deputy Cathal Crowe asked the Minister for Finance the estimated cost of restoring the regional uplift for section 481 tax relief for 2025-2029. [36908/24]
View answerI propose to take Questions Nos. 174 and 198 together.
Finance Act 2018 introduced a short-term, tapered regional uplift under section 481 for productions being made in areas designated under the State aid regional guidelines (among other criteria). The purpose of the regional uplift was 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 lost as a result of the COVID-related public health measures. The tapered withdrawal of the uplift then restarted, reducing to 3% in 2022, 2% in 2023, and the uplift has now ceased.
As the regional uplift was an approved State aid, any restoration of the uplift would require approval from the European Commission. It should be noted that a further extension of the uplift in its previous form may not be possible. While it was not a Regional Aid, the relief operated 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 up to the point of the relief's conclusion at end 2023, it is not clear that a similar approval would be granted if the uplift were to be re-introduced.
There are presently no plans for the reintroduction of a regional uplift or any other regionally-targeted supports for the film industry under section 481. However, the Deputy will be aware that the cap on eligible expenditure for audio-visual productions was increased from €70 million to €125 million as part of Budget 2024. This increase in the cap, as well as the extension of the section 481 Film Tax Credit to 31 December 2028, is a strong indicator of this Government’s desire to support the film industry in Ireland.
In addition, there are other supports available for the sector. In 2023 for example, Screen Ireland invested over €5 million in projects, initiatives and activities that contributed to the nationwide development of the sector and, as the Regional Uplift tapered out, it also ring-fenced up to €3.5m in its 2023 budget for nationwide activity. This included the establishment of a Nationwide Additional Production Fund; 13 awards were made as part of this fund to the value of almost €2.7m across 13 projects.
In relation to the potential cost of a new uplift, I am advised by Revenue that the Exchequer cost of the regional uplift would be dependent on the number of qualifying films, as well as the timing and value of claims made for the relief into the future. As information on future expenditure in this sector is unknown, there is no basis available to provide an accurate estimate of the information requested by the Deputy.
However, the Deputy may wish to note that the estimated additional cost of the regional uplift on claims paid during 2022, the latest year for which data are available, was approximately €3.4m. This estimate includes both payments for upfront claims (based on 90% of budgeted expenditure) and payments for balancing claims from previous years. The regional uplift in 2022 was at 3%.
