Dáil Éireann Debate, Tuesday - 23 November 2021
250. Deputy Neasa Hourigan asked the Minister for Finance his plans to ensure that employers availing of the new tax credit for the digital gaming sector announced in Budget 2022 are asked to provide at a minimum the living wage to their employees and to accept the Workplace Relations Commission codes of practice as a condition for the tax relief; and if he will make a statement on the matter. [57442/21]
Amharc ar fhreagraFinance Bill 2021 provides for the introduction of a new tax credit for the digital gaming sector. Digital gaming is a sector that has seen exponential global growth in the past decade, however this growth has not been reflected in industry growth here in Ireland. Ireland has the potential to utilise the synergies with our established film and animation sectors, to support employment in creative and digital arts in the State.
The relief will take the form of a corporation tax credit, the beneficiaries of which will be digital games development companies. The rate of the credit will be 32%, available on eligible expenditure of up to €25 million per game. The credit will be available on expenditure incurred in the design, production and testing stages of the development of qualifying digital games, provided certain conditions are met.
It is important to note that European Commission State aid approval will be required prior to the introduction of the tax credit. Therefore the Finance Bill 2021 legislation is being introduced subject to a commencement order, pending completion of the State aid approval process.
As the relief is a cultural one, in order to avail of the credit, a digital game development company must first apply to the Minster for Tourism, Culture, Arts, Gaeltacht, Sports and Media for a cultural certificate. As part of this certification process, a digital game development company will be required to complete an “Undertaking in respect of quality employment” in order to qualify for the relief. This undertaking is similar to the requirements in place under the Section 481 Film Tax Credit. It commits applicants to compliance with all relevant employment legislation. It is crucial that employee rights are upheld in all industries and the inclusion of this provision reinforces the importance of adhering to employment legislation in the digital gaming sector.
The “Undertaking for quality employment” does not include a requirement to adhere to Workplace Relations Commission Codes of Practice or to pay the Living Wage. However the undertaking commits applicants to have in place written policies and procedures in relation to grievances, discipline and dignity at work. I am satisfied that the conditions outlined in the “Undertaking in respect of quality employment” are effective in ensuring that recipients of the Tax Credit for Digital Games are operating in accordance with applicable employment law. If an applicant company does not adhere to the conditions specified in the undertaking, any credit claimed may be subject to recoupment by Revenue.
The Programme for Government includes a commitment to progress to a living wage over the lifetime of the Government. The Low Pay Commission is currently examining the issues around this commitment and will make recommendations on the best approach to achieving it within the lifetime of the Government. However as the Living Wage has no legislative basis and is therefore not a statutory entitlement, and as the Low Pay Commission has not yet made recommendations to Government regarding the development of the Living Wage, I do not believe its inclusion as a requirement for the Tax Credit for Digital Games is appropriate.
It is important to note that the monitoring of compliance with employment rights legislation is primarily a matter for the Department of Enterprise, Trade and Employment, through the Workplace Relations Commission. While the importance of employment rights will be reflected in the tax credit for digital game, the WRC remains the appropriate avenue to address non-compliance with employment rights legislation.
