Fianna Fáil Finance Spokesperson Michael McGrath TD has said the government needs to use the opportunity afforded by Budget 2019 to improve the taxation and operating environment for small and medium enterprises (SMEs) in the indigenous economy.
Deputy McGrath commented, “From Fianna Fáil’s perspective, protecting Ireland’s foreign direct investment (FDI) offering in every respect remains and always will be a priority. Multinational investment will continue to play a hugely significant role in our economy. However, we also believe the government needs to place a greater focus on improving the taxation and operating environment for SMEs in the indigenous economy, and Budget 2019 presents an opportunity to do this.
“Given the growing dependence on the corporation tax receipts and economic output from a small number of multinationals, the best way to avoid an over reliance on FDI is to nourish and support SMEs in the domestic economy. This requires a taxation and enterprise environment that encourages and rewards start-ups and supports existing businesses.
“Time and time again, SME owners and business groups raise the same issues with us. Ireland’s capital gains tax regime for entrepreneurs is now uncompetitive and needs to be improved. Investment is now highly mobile and our offering for existing start-ups has to be enhanced, particularly when compared with the CGT scheme for entrepreneurs in the UK.
“In relation to share options, the scheme introduced in last year’s Budget (known as ‘KEEP’) for a preferential tax treatment of these options in SMEs has not worked and is not regarded as attractive. It needs to be revisited and improved. As Finance Spokesperson, I am also consistently receiving feedback that the Employment and Investment Incentive Scheme is overly restrictive and operationally bureaucratic. It too needs to be reformed. We need to introduce an investor relief to encourage investment in Irish SMEs.
“We must also see further progress towards equal tax treatment for the self-employed with PAYE workers. We need to tackle in a meaningful way issues such as high insurance costs that are crippling many SMEs, particularly in businesses that rely on significant public footfall.
“The best way to respond to the high level of public debt highlighted in today’s report and to meet the challenges of Brexit is to encourage and support a vibrant domestic Irish economy. SMEs need our assistance and Budget 2019 needs to secure progress on many of the issues Fianna Fáil has been highlighting,” concluded McGrath.