The UK government's lobby against Canada's subsidies for game companies has been unable to gain any footing with the World Trade Organization.
Tiga has long campaigned
for tax breaks for UK games developers, similar to those enjoyed in Canada, France and some U.S. states. Although the UK government has been reluctant to explore such breaks, it agreed to look into complaints that the subsidies of other countries constituted an unfair advantage under international trade rules.
However, the UK government now admits that no rules on subsidies exist under the WTO General Agreement on Trade in Services and therefore no complaint can be made.
"We cannot stop our competitors from benefiting from tax breaks, but there is a simple solution: copy them," says Tiga CEO Richard Wilson.
"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," Wilson added, urging the government to introduce a 20 percent tax break into the budget "similar to the EU approved French regime that applies to games that pass a cultural test."
Wilson says such a tax break would mean an additional £220 million ($317m) would be invested -- and could create up to 1,600 jobs.
"This measure would cost HM Treasury £150 million ($216m) over five years – a fraction of the recent £100 billion ($144bn) taxpayer bailout of the UK banking system," he concluded.