Jim Sheridan today gave the Irish government a bleak warning - retain the Section 481 tax incentive or 80% of Irish film industry activity will disappear and with it 80% of the direct employment it currently provides.

He was launching a report commissioned by Screen Producers Ireland (formerly Film Makers Ireland) which cogently makes the case for the enhancement of the incentive in addition to its retention beyond the date announced for its termination, 31 December 2004. Significantly RTE and the actors' and technicians' branches of the SIPTU union, are also parties to the report's findings.

The report makes four key recommendations:

* A ten-year extension to film tax incentives, subject to a five-year review. This will assist in creating a stable environment to help industry planning cycles (on average 18 months) and to sustain the commitment of indigenous talent.

* An increase [doubling the present limit] of the cap on investment to Euros 21m. The budget level defining the cap on investment has remained the same for the last 16 years. An increase is now required to reflect the changing market and to allow Ireland compete against other countries with tax incentives.

* The establishment of a Certification Standards Board to advise and assist the certification process administered by the Department of Arts, Sport and Tourism. This would address some of the concerns within the Irish civil service that the scheme doesn't operate with sufficient transparency, and is open to abuse.

* The incorporation of recently published Revenue Guidelines in legislation in order to protect the industry and tax incentive scheme. This is essentially a tactical move that would have the side-effect of giving the scheme some legislative permanence.

Looking forward "at the bright side of things for once", Sheridan said, "This report shows that we are now in a position to support additional films, and further develop the indigenous industry. Feature film and television drama production creates jobs, generates economic activity, helps tourism and pays taxes. It also attracts inward investment to Ireland that would not otherwise take place. With the right direction and support, and our pool of home-grown talent, Ireland's industry has the potential to grow significantly in the next few years."