Fine Gael plans R&D tax relief to boost digital games industry

22 Feb 2011

Ireland’s high-tech sector will lead the Irish economy out of recession, Fine Gael Leader Enda Kenny said yesterday as he outlined new proposals to boost games firms by allowing companies to offset the R&D credit against employers’ PRSI as an alternative to corporate tax.

Speaking at Popcap Games on Pearse Street yesterday, Kenny said Fine Gael, if in power, would implement specific policies to support the digital games industry. For example, it would provide €10m from the Innovation Fund to support new start-up gaming companies.

The proposals were outlined at the same time Fine Gael released a Mario Bros-style video game showing Kenny leaping various obstacles.

From R&D tax credits to the Digital Docklands

As well as providing €10m from the Innovation Fund Ireland to be reserved for investment in new digital gaming ventures, Fine Gael Dublin central candidate Paschal Donohoe said the party intends intends to optimise the structure of R&D tax credits currently on offer to include the costs associated with the development and design of games.

It intends to trial a sectoral-specific plan to attract global game designing talent to Ireland; develop the ‘Digital Docklands’ concept and promote Ireland internationally as a digital gaming hub; introduce a digital media component to transition-year students and ensure Ireland is marketed as a location for digital gaming investment.

“The high-tech sector of the Irish economy can help lead us out of recession,” Kenny said. “It can create new jobs in high value added areas and offer hope for some of our best and brightest young people who otherwise might end up emigrating.”

Outlining his proposals on building a digital economy in Ireland Kenny said his party intends to accelerate capital allowances on software purchases against income tax and corporation profits tax from eight to three years.

“We will ensure that all payments to Government departments and agencies can be made electronically and we will enable all licences and permit applications for business to be carried out online.

“In the healthare sector, we will invest in information technology so that households and primary care centres can share information about blood test and X-ray and allow for all referrals to be made online.”

Public services, digitally

He added that more public services to individuals, such as passport and driving licence renewals, can be done digitally, as well as creating financial incentives for using the online mechanism available.

A crucial part of the Fine Gael plan involves investing €2bn in delivering next-generation broadband under its NewERA plan to modernise Irish infrastructure. Under this plan, Fine Gael aims to deliver high-speed broadband to every home and business in the State by delivering fibre to the home or kerb for 90pc of homes and businesses, with the remainder provided by wireless broadband services.

“If we do not invest today in the industries and sectors of our economy that can provide jobs and growth for the next five, 10 or 20 years, we are failing in our duty,” Kenny said.

“Failing to plan and failing to be ready for the international challenges that lie ahead. We are competing on a global scale for investment and jobs and our ability to compete is determined by the actions we take right now,” Kenny said.

Donohoe cited the example of the US$500m that Call of Duty: Modern Warfare 2 grossed in just five days of sale. “This dwarfed the opening weeks of blockbuster movies like The Dark Knight (€203.8m) and Harry Potter and the Half Blood Prince (US$394m). I believe, under Fine Gael plans, Ireland is well placed to capitalise on this market, bringing high-tech jobs and investment into the country.”

Mario Kenny

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years