Ahead of the upcoming Croatian parliamentary elections next week, we sent a query to all political parties (which according to the latest research exceed the threshold of 5% at the national level) related to the launch of an investment incentive (cash rebate). The query was as follows:
“Since the elections are approaching, and we could not find this specific topic in your political program, we are interested in your position on the incentive program for investments based on the principle of cash rebates in video games. Namely, for many years, the Republic of Croatia has been encouraging domestic and foreign film production through the program Filming in Croatia (filmingincroatia.hr), which returns up to 30% of the invested funds to the producer.As a Cluster, it is in our strategic interest to extend a similar initiative to video games, since the Law on Audiovisual Activities from 2018 equates video games with film. We would beg you for a response by April 11, 2024, when we will publish a summary of all responses from political parties.”
We sent an inquiry to the parties HDZ, SDP, We Can, Bridge, Homeland Movement. Everyone except the Homeland Movement gave an answer. We present the answers of the mentioned parties, with bold parts of the text that directly concern our inquiry:
HDZ – supports after an impact assessment is done (which Olsberg is currently creating)
The Government of the Republic of Croatia, led by the Croatian Democratic Union, was the first in 2018 to recognize the growing video game industry, which is developing more and more every year and strengthening the innovation and competitiveness of the Croatian economy. One of the four key priorities of the Government in this decade is the digital transformation of Croatia, in which the video game industry plays an important role as a growing branch of the cultural and creative sector. The state support program for encouraging investment in the production of audiovisual works is one of the most profitable state support programs which, according to the 2020 Institute of Public Finance Study, “For every HRK of incentives paid out through the program of incentive measures, HRK 11.5 of economic effects are created in Croatia, and HRK 6.7 of taxes and contributions are paid into the state and local budgets.” We believe that the creation of an incentive program for the video game industry can certainly contribute to attracting investment and the development of the Croatian video game industry, but we also consider it relevant to make a preliminary assessment of the impact of the introduction of such a program. Impact assessment is important not only in attracting investments, but also in influencing the development and capacitation of the workforce. We have shown our interest in the improvement and development of the Croatian video game sector primarily through HDZ’s previous policies, especially by including video games in the Law on Audiovisual Activities. This enabled financing through the Ministry of Culture and Media, including the Croatian Audiovisual Center, through whose budget the financing of the development and production of video games and the encouragement of the development of companies from the video game sector began. Through the National Recovery and Resilience Plan, we secured 33.2 million euros for creative and cultural industries, including video games. We have signed a convention on avoiding double taxation with the United States of America, which will facilitate business and increase the competitiveness of the Croatian cultural and creative sector, especially entities oriented to the exchange of goods and services such as the video game industry.
We believe that for the further improvement of the sector, in terms of investments, but also investments in video games of cultural significance, it is necessary to consider the possibility of developing a financing system modeled on the European and Croatian film industry, and we are active at the EU level in finding a sustainable financing system for development and production video games. As we emphasized in our election program “For all challenges”, in the next mandate we will provide additional financing to encourage investments in audiovisual activities and other cultural and creative industries.
SDP (supports)
Following your inquiry, we would like to express our full support for your proposals. Over the past decade, the video game industry has established itself as an important segment of the cultural and creative industries, and has outgrown the role of mere entertainment and turned into an educational phenomenon. We, as the council for culture and design of a social democratic party, logically support the need to return funds to production as a stimulus for the further development of your industry, just as is customary in the case of encouraging the production of domestic and foreign films in Croatia. We hope that we will have the opportunity to help the development of the video game industry in Croatia, and that we will be able to use concrete measures to create the conditions for the progress of your industry.
We can (supports)
From the perspective of our cultural policy, the priority is to organize the system and ensure the necessary infrastructure for the sustainability and development of all cultural industries, as it was once done for audiovisual activity, of course in accordance with the specifics of each of the segments of this sector. The goals of such interventions would be to increase the availability of cultural products to all citizens, encourage cultural creativity, quality working conditions, as well as the production of new value. Each of these industries needs proactive system support in integration with other areas of activity – economy, tourism and education. Cash rebate modeled on audiovisual activity is in line with this vision and we would support it in the context of the wider policy of the development of the video game industry, as well as consider whether certain aspects of the development of video games belong to artistic activity and, consequently, whether creators can acquire rights that brings the status of a freelance artist.
Bridge (supports)
With its Political Declaration from 2022, Most has clearly defined itself as a party that supports the free market of goods and services as a fundamental concept of the exchange of goods between individuals, with due exceptions that primarily relate to the installation of safeguards for socially sensitive and vulnerable social groups, and to areas of strategic interest for the development of society and the state. We therefore believe that the incentive system should be applied where there is a strategic interest or some other objective indicator of the benefits of the sector to a group of citizens or society as a whole. However, respecting the principle of equality of categories from the law you refer to (the Law on Audiovisual Activities from 2018), we tend to support the application of the so-called cash rebate model (in the same or similar model as already applied to domestic and foreign film production) to the video game development sector. Most also believes that the IT sector is one of the backbones of Croatia’s further development and believes that encouraging the video game industry in Croatia would further strengthen the sector as a whole.
