IBEC warns Irish tax system can't compete with UK without reform

The national voice of business in Ireland, IBEC has warned the Government that the nation is in danger of being outmanoeuvred in business by the UK without reform of its tax system.

The organisation said the coalition must “end discrimination against the self-employed, introduce meaningful capital gains tax relief for entrepreneurs and enhance investment schemes”.

Following the launch of its pre-Budget submission, IBEC’s CEO, Danny McCoy insisted the Government must do more to help the country’s new and growing businesses to compete with the UK on a larger scale.

“[UK Chancellor] George Osborne’s recent budget puts a challenge up to the Irish Minister for Finance [Michael Noonan] to compete,” said McCoy.

“We need to compete on the corporate tax front, but also for entrepreneurs and for talent. So how we handle the personal taxation system is crucial, but also the capital gains tax for those entrepreneurs trying to reinvest back into businesses.”

IBEC also stated the need for the Government to ask the European Union (EU) for greater flexibility on capital expenditure; easing the income tax burden for higher earners.

In a pre-budget submission to the Department of Finance, the group said a major increase in capital spending of up to €1bn was required to tackle infrastructure and investment deficits as the economy recovers.

On a more positive note, the Bank of Ireland has upped its lending to the small business community by 18 per cent, with demand for credit among growing SMEs continuing to grow.

The Bank – which is due to report first half figures this week – has confirmed it approved approximately €2.5bn in new credit to SMEs during the first half of 2015 – an 18 per cent increase on the same period last year.

Mark Cunningham, director of business bank, Bank of Ireland, said: “The positive growth trajectory was evident across all the key sectors of the economy in the first half of 2015, with increased demand for credit.

“Business owners are regaining the confidence to commit to overdue capital expenditure and also tentatively considering new opportunities; a trend which we expect to accelerate as we move into 2016.”



Image: ECB

Date published 27 Jul 2015 | Last updated 27 Jul 2015