Death and TaxesÂ
Sony and Sega are being accused of abusing tax laws in the United Kingdom. In 2014 the UK government passed a new tax law called the Video Game Tax Relief. This was meant to give tax breaks on smaller start-up companies as they get a footing in the market. However, due to certain loopholes, larger studios like Sony and Sega have been able to use this law to their advantage. It is estimated that Sony and Sega have been able to avoid paying millions of pounds in taxes. They have also been accused of taking money from the independent gaming companies as well.
This is, of course, is an unintended consequence of the tax break. The law was passed with smaller companies in mind. Not industry giants like Sony. While this has outraged some people. There are those that while acknowledging the actions of Sony and Sega might be somewhat nefarious, do actually help the economy in the long-run.
It has been estimated by experts, that for every pound that is put into the video game industry, the return into the economy is much more. So when millions of dollars are being poured into games instead of being taxed by the government, it starts to add up.
This is, of course, a very controversial and contentious topic. Other critics of Sony and Sega have demanded that the Video Game Tax Relief be repealed or radically changed in order to help out small companies.
Nothing of the sort has happened so far. However, there is sure to be more news about this in the coming weeks.
Please let us know what you think in the comments below. Should the law be changed in order to help the little guys? Or is Sony and Sega just making good business moves?