Launching the Small Firms Association’s Budget 2019 submission, Sven Spollen-Behrens, SFA Director, said: “Budget 2019 must focus on small businesses in Ireland and support this important sector to fulfil its potential. In doing so, the Government would reduce the risk on our economy from over reliance on foreign direct investment while seizing an important opportunity to future proof our economic model.
“The SFA is calling for a whole-of-government national Small Business Strategy, with a roadmap towards significant policy goals: increased productivity, export diversification etc. Immediate changes in Budget 2019 would support the achievement of these goals.”
Mr Spollen-Behrens stated: “Ireland’s competitiveness is under threat. Government must ensure that the mistakes of the past are not repeated by allowing business costs to become unsustainable in a period of economic growth. At a time when positivity among small businesses is at its lowest since the immediate aftermath of the Brexit vote, it is vital that no measures that impose additional costs on small companies are introduced.”
At 33%, Ireland has one of the highest rates of capital gains tax (CGT) amongst developed economies. The SFA is calling for a reduction in CGT to 20% across the board, to make investing in a business in Ireland more attractive. CGT represents only 1% of the Government’s tax revenue, so there is very little to lose by reducing the rate, but the benefits could be significant. The SFA is also calling for CGT Entrepreneur Relief to be extended to compete with the UK scheme.
Mr Spollen-Behrens concluded: “Supporting small businesses would mitigate some of Ireland’s current vulnerabilities and create a true entrepreneurial culture with benefits for entrepreneurs, employees and communities.”
Small business priorities for Budget 2019:
- Protect competitiveness by ensuring that Budget 2019 does not impose additional costs on small businesses
- Reduce the headline rate of CGT to 20% for all
- Increase the lifetime limit for CGT Entrepreneur Relief to €15 million
- Increase the Earned Income Tax Credit to €1650 to equal the PAYE tax credit
- Introduce measures to boost the viability of residential property construction
The full SFA Budget 2019 submission can be found here. A summary newsletter version of the submission can be found here.