The Small Firms Association (SFA), an Ibec affiliate, has called for a cut in the Irish capital gains tax (CGT) rate to boost reinvestment by entrepreneurs and to increase the number of startups.
The SFA is holding its annual conference today and demanding tax cuts is not strange for business lobbies but any potential entrepreneur who worries about CGT should not waste his or her time preparing for failure.
The rate was halved to 20% in the 1990s and it was one of the self-financing tax cuts that was touted during the bubble.
The current rate is 33% and in last October's Budget,
finance minister, announced a new Capital Gains Tax
relief for those who re-invest in assets used in new productive trading
The relief is conditional on holding the new investment for a minimum period of
Ireland's corporate tax rate and employer social security rates are among Europe's lowest.
On personal taxes AJ Noonan, SFA Chairman, called for the personal tax bands to be extended to encourage personal effort and enterprise. “When a Single Person hits €32,500 in salary they get hit with the higher rate of tax. The incentive to work is not there. Risk must be rewarded.”
Addressing small firm concerns on public procurement, Noonan said that small businesses are effectively being prohibited from tendering for public contracts, in the move to centralise government procurement into large-scale contracts.
“In 2013, the published data suggests that 28% of tenders are being awarded to countries outside of Ireland, up from a previous high of 18% recorded. Ireland frequently tops the list of countries most likely to award to non-national countries and this trend is increasing all the time.”
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