Tiga said today that the UK government’s drive to help the UK video games industry by lodging a complaint against Canada’s support for its games industry with the World Trade Organisation (WTO) had ended in a cul de sac. Tiga’s statement follows the Government’s admission that no rules on subsidies exist under the WTO General Agreement on Trade in Services. Therefore, there is no prospect of lodging a complaint to the WTO in relation to the extraordinary subsidies Canada provides to its video game producers.
Richard Wilson, CEO of Tiga, said:
“Last year the Government said that the UK via the European Union (EU) would take legal action against Canada if its support for its video games industry violated WTO rules. We now know that there are no legal grounds on which to lodge a complaint.
“We cannot stop our competitors from benefiting from tax breaks but there is a simple solution: copy them. Just as Australia, Canada, China, France, Singapore, South Korea and some American states help their games industries to grow through extensive tax breaks, so the UK Government should back our games industry with a tax break for games production. If you can’t beat them, join them.
“The Government stands naked before the games industry, bereft of a credible fiscal policy with which to support the sector. The Government should announce in the Budget its intention to introduce a 20% tax break for games production, similar to the EU approved French regime that applies to games that pass a cultural test. With a tax break of this kind in place, an additional £220 million would be invested, potentially creating a further 1,600 high quality jobs. This measure would cost HM Treasury £150 million over five years – a fraction of the recent £100 billion taxpayer bailout of the UK banking system.”