Big future for small businesses

The Small Firms Association (SFA) launched its Budget 2020 submission this week which calls upon the Government to nurture entrepreneurship and small businesses.

The SFA claims that supporting small businesses would mitigate Ireland’s over-reliance on foreign direct investment (FDI) and that the Government has nothing to lose from a capital gains tax overhaul.

Sven Spollen-Behrens, SFA Director, said: “Budget 2020 must place a clear focus on Ireland’s small business owners by providing certainty on costs and maintaining competitiveness. By doing so the Government would reduce the risk on our economy from an over reliance on foreign direct investment and Brexit, while seizing an important opportunity to future proof our economic model.”

He added: “The SFA continues to call a whole-of-government national Small Business Strategy, with a roadmap towards significant policy goals such as increased productivity, export diversification etc. Immediate changes in Budget 2020 would support the achievement of these goals.”

Ireland’s capital gains tax (CGT) currently stands at 33 per cent and is one of the highest rates amongst developed economies around the world. The SFA is calling on the Government to reduce the CGT to 20 per cent across the board in a move that it claims would make investing in a business in Ireland much more attractive.

Currently the CGT represents just one per cent of the Government’s tax revenue, and the SFA feels that there is very little to lose by reducing this rate, and that the benefits of doing so could be significant.

Mr Spollen-Behrens said: “To meet the Government’s target of increasing domestic productivity by one per cent per year, greater investment in education and upskilling for small business is needed. At a time when positivity among small businesses is at its lowest seen by the SFA, it is vital that Budget 2020 boosts confidence among our small business community.”

The SFA is also calling for CGT Entrepreneur Relief to be extended to compete with the UK scheme.

“Brexit poses one of the biggest challenges faced by small businesses in years. Supporting small businesses would mitigate some of Ireland’s current vulnerabilities and create a true entrepreneurial culture with benefits for entrepreneurs, employees and communities,” said Mr Spollen-Behrens.

The SFA Budget 2020 looks to increase the lifetime limit for CGT Entrepreneur Relief to €15 million, as well as removing the €3 million cap on the value of business assets allowable for Retirement Relief for those aged 66 and over.

The budget will also look to increase the Earned Income Tax Credit to €1,650 to equal the PAYE tax credit, while using funding from increases in the National Training Fund levy for the Skillnet Programme.