SFA calls for a reduction in Capital Gains Tax

The Small Firms Association (SFA) published its Budget 2019 submission this week, with calls for a reduction in Capital Gains Tax from 33% to 20% across the board.

Presently, Ireland has one of the highest rates of Capital Gains Tax amongst the world’s developed economies. The SFA believes a commitment to reducing it to 20% would make investing in Irish businesses more appealing.

The SFA points to the fact that Capital Gains Tax equates to just 1% of the government’s total tax revenue. Subsequent reductions in the rate would mean the government has little lose but plenty to gain in terms of the competitiveness of the nation’s economy.

As part of its Budget 2019 submission, the SFA is also pushing for an extension of Capital Gains Tax Entrepreneur Relief in line with the UK’s comparable scheme.

Sven Spollen-Behrens, Director, SFA, said at the launch of the SFA’s Budget 2019 submission: “Ireland’s competitiveness is under threat. The 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 [EU referendum], it is vital that no measures that impose additional costs on small companies are introduced.”

Ibec, Ireland’s leading association for businesses and employers, says the upcoming Budget 2019 must place small businesses at the heart of new legislation.

In doing so, Ibec believes the government would minimise the country’s economic risks, such as the overreliance on foreign direct investment. It could also futureproof Ireland’s economic model simultaneously.

According to Ibec’s latest quarterly economic outlook, economic growth is forecast at 5.7% for 2018. However, its report struck a similar tone to the SFA in warning against complacency “at a time when external threats are increasingly likely to materially impact on our growth”.

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Date published 7 Sep 2018 | Last updated 7 Sep 2018