British tax incentives are luring lucrative international film productions away from this country, an industry group says.

Andrew Lowe, vice-chairman of the Audio-visual Federation (AF) and producer of the The Wind that Shakes the Barley, called yesterday on the Government to boost film production tax incentives to allow the industry to combat foreign competition.

Mr Lowe said the main source of competition was the UK, whose government this year introduced tax breaks aimed at attracting US producers to film there.

"The US is now focused on the UK as the main location to shoot outside America," he said.

"The incentives are designed to lure away productions that in some cases would have otherwise come to Ireland."

The federation's annual review, published yesterday, says that the value of film production in the State slumped from €244.3 million in 2003 to €33.5 million last year, though this looks set to recover this year to €60 million.

The 2003 figures included King Arthur, a big budget epic produced by Jerry Bruckheimer, who made Pearl Harbor.

The John Boorman-produced Tiger's Tail boosted this year's figures.

The Wind That Shakes the Barley, was part of 2005's output.

Mr Lowe said a key feature of the British tax package is that it covers non-EU labour.

The original Irish incentives, contained in section 481 of the Taxes Consolidation Act, had this provision, but the Oireachtas subsequently limited it to workers from the EU.

He explained that in many cases, this means that the cost of hiring big stars for productions here is not covered, while it is in Britain.

In a pre-budget submission to Minister of Finance Brian Cowen, the federation is calling for the incentive to be expanded to non-EU labour. It also wants the cap for the total qualifying amount for the tax incentive to be increased to €50 million from €35 million, and the maximum allowable individual investment to rise to €50,000 from its current level of €31,750.

The incentive applies to 80 per cent of each individual investment. The federation says this should be increased to 90 per cent for international productions and 100 per cent for Irish films.

Mr Lowe explained that international production is needed to help underpin the industry here. He pointed out that Hollywood producers have been aware for two years that the British incentives were coming, and consequently, activity there has mushroomed.