Fianna Fáil Finance Spokesperson Michael McGrath TD has said the government needs to use the opportunity afforded by Budget 2019 to improve the taxation environment for entrepreneurs and SMEs in the Irish economy.
Deputy McGrath commented, “While Fianna Fáil’s discussions with government on Budget 2019 are ongoing, we have emphasised in the negotiations the need for measures to improve a number of tax schemes for entrepreneurs and SMEs. This is vital given the uncertainty from Brexit and the need to encourage and support more start-ups and business expansions across the economy.
“In particular, we have conveyed to the Minister for Finance the need to improve the Employment and Investment Incentive (EII) Scheme, the Key Employee Engagement Programme (KEEP) and the CGT entrepreneur relief.
“As a party, we have been receiving consistent feedback around operational issues with the EII Scheme. More resources are needed for Revenue to process applications faster. In addition, the application process needs to be streamlined and both the investment limits and timing of relief need to be improved.
“The share-based remuneration scheme – KEEP – is still in its early stages but the feedback is that take-up is below expectations, principally because of the restrictions in the rules. Given the importance of share-based remuneration for SMEs to attract and retain key employees, these restrictions needs to be eased in a targeted way. In addition, Fintech companies should be allowed to participate in the Programme.
“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. We would like to see the €1m lifetime limit increased in this Budget.
“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 foreign direct investment is to nourish and support entrepreneurs and SMEs in the domestic economy. This requires a taxation and enterprise environment that encourages and rewards start-ups and supports existing businesses,” concluded McGrath.