It is clear to many of us working with small businesses that the story of the Irish economy is based largely on the phenomenal success of the foreign direct investment (FDI) sector. From a policy perspective, this amounts not only to a risk (heavy reliance on FDI in an uncertain global environment), but to a major missed opportunity for Ireland. Small business with less than 50 employees make up almost 99% of all businesses and employ half the private sector workforce, some 720,000 people – but this sector is not fulfilling its potential in terms of productivity, added value, exporting, innovation and scaling.
That’s why the SFA has launched a campaign for a national Small Business Strategy for Ireland, just as ambitious as the strategic focus on FDI from the 1950s to the present day.
We need a Small Business Strategy to ensure that all parts of the State system get behind Ireland’s indigenous businesses to unlock their untapped potential. We need a clear statement from government that it will support home grown enterprises and stand behind those individuals who take the risk to start their own business.
The first publication of our campaign highlighted the key facts and figures that show that small businesses are the backbone of the Irish economy. The second made the case for a national Small Business Strategy, showing how the absence of such a strategy has left small businesses lagging far behind multinationals (for which there is a clear national strategy) on many important metrics. It highlighted the potential benefits of such a strategy and the key considerations for its development. Both of these publications are available on the SFA website at www.sfa.ie/0/NSBS
Our previous work has highlighted that one of the most important pillars of a national Small Business Strategy would be a comprehensive tax policy (and the Budget 2019 has failed the small business sector again). Taxation is one of the most powerful tools available to government to achieve its objectives. If this Government or a future one decides to get behind small businesses, tax policy must be activated to work towards this goal.
Working together, drawing on insights from our respective member and client bases in the small business sector, SFA and PKF O’Connor, Leddy & Holmes are publishing a new strategy paper outlining the main tax changes that are required. It proposes changes to current tax rates, amendments to existing schemes, ideas for new targeted reliefs and suggestions on how to reduce the burden of tax administration on small companies. These proposals are grouped under three themes:
I would like to thank PKF O’Connor, Leddy & Holmes for their collaboration on this paper, in particular Tax Partner Catherine McGovern. Her deep tax knowledge, combined with extensive experience as a practitioner advising businesses, has been invaluable.
Sincere thanks also to the owner-managers who make up the SFA National Council, many of whom have worked tirelessly for years and decades to achieve a tax regime that supports entrepreneurs and small businesses.
We are officially launching the new SFA publication on Thursday 18 October and but SFA members can download the document from today.