Rockstar Games, the developer of Grand Theft Auto, has issued a statement in response to criticism that it is unfairly taking advantage of tax incentives for game developers, which have directly resulted in the creation of "well over 1000 highly skilled long-term jobs" across the UK.

The criticism originated with Tax Watch, a UK-based "research think tank" that monitors and reports on the tax status of the country's largest corporations and wealthiest individuals. In a report titled "Rockstar Takes the Pot," the organization states that Rockstar's claims under the 2018/19 video game tax breaks accounted for 37% of all claims made by the UK video game industry in that year, and that since 2014, "Grand Theft Auto 5" has generated £6 billion (approx. The company said it has not paid UK corporate tax for the past four years, despite recording sales of more than £7.8 billion.

"According to its 2019 financial results, the company claimed £37.6 million in video game tax breaks, bringing its total to £80 million since the scheme was introduced," the Tax Watch report said." Of the 1,110 claims made since the VGTR was launched, Rockstar has accounted for a quarter of the bailouts claimed from the government, while only two games have been announced as eligible for the bailout."

The UK's video game tax relief scheme came into effect in 2014 and, based on this pre-approval consultation report, was expected to be "particularly beneficial for smaller companies" that make up the bulk of the UK gaming industry. However, in order to avoid competition for tax breaks within the industry, "all companies in this sector are eligible."

One of the pre-approval criteria cited in the consultation was that the relief program be "sustainable and free from abuse" and that it would "create substantial new tax avoidance opportunities" for companies using the scheme. It seems to me that the £80 million ($104 million) in tax avoided since the program was introduced is a pretty big deal, but in a statement sent to VG247, Rockstar defends its claim that the program is working as intended.

"The UK program to support the growth of the broad creative industries through tax relief is a proven success. The program has directly led to Rockstar Games significantly increasing its investment in the UK and creating far more than 1,000 highly skilled, long-term jobs in London, Lincoln, Yorkshire and Scotland," said a Rockstar representative.

"This investment and the success of UK video games supported by this program will not only contribute significantly to the economy and UK tax revenues, but will help cement the UK's position at the forefront of video game development for years to come.

In addition, Ukie, the UK's games industry association, has described the video game tax credit program as "a progressive policy that shows the UK understands the importance of games as a major creative industry."

"We know that the VGTR provides a significant investment return for taxpayers: for every £1 invested in the games industry through the VGTR, £4 is returned as added value to the economy. But more importantly, the VGTR directly supports 4,320 productive full-time jobs in game development positions nationwide, almost a third of all development workers."

Rockstar is far from the first video game industry giant to be accused of not paying taxes in the UK: an October 2019 Guardian report noted that companies including Warner, Sony, and Sega had also claimed large tax offsets through the program

Interestingly, the report also noted that "the program is not a tax offset program.

Interestingly, the Tax Watch report also speculates that a new Grand Theft Auto film is in production, stating that "the huge bill Rockstar is putting in is likely related to the production costs of GTA6." "We're developing a sequel to the best-selling game of the past decade, and it's been over six years now, but I don't think that really qualifies as news.