PRODUCT PROFILE

Latest Dublin Prices

Directors want more cuts, less taxes

Wednesday, October 24 12:14:14

A pre-Budget submission from the Institute of Directors (IoD) today said that the upcoming Budget should be more about cutting Government spending than taxing business.

The organisation said it is concerned that businesses are being targeted for a disproportionate percentage of additional taxation measures to achieve budget targets in 2013 and that these measures, if implemented, will have a serious negative impact on business growth in Ireland.

The IoD is calling for no increase in rates of employee or employer PRSI in Budget 2013 and believes that the Government must reconsider proposals for businesses to be liable to pay the first four weeks' benefit for employee sick pay, as a matter of urgency.

In research conducted with members of the Institute of Directors in Ireland ahead of Budget 2013, the directors surveyed overwhelmingly agree, with 81pc indicating that there should be no increase in employee or employer PRSI and 70pc stating that the statutory sick pay proposals are unfair or highly unfair.

Indeed, the E90 million that is expected to be generated from statutory sick pay proposals could be saved through greater efficiencies in the Department of Social Protection, where E92 million was identified in a report by the Comptroller and Auditor General as having been overpaid to welfare recipients in 2011 alone, it said.

Almost 3 in 5 (59pc) directors surveyed do not think that money saved through budget cuts in the past year has been spent wisely by Government, with directors citing public service spending on salaries, allowances and benefits as a key concern.

A further 57pc of directors surveyed indicated that the Government has not demonstrated transparency and accountability in its term in office to date.

When asked to rate the performance of individual Government Departments, over three-quarters (77pc) of directors rated the performance of the Department of Health as poor or very poor. The Department of Finance was identified as the best performing department, with 1 in 2 (49pc) directors rating its performance as "good" or "excellent".

The IoD said Government must honour commitments made in the Programme for Government and act on the recommendations of the Tax Strategy Group ahead of last year's budget, to ensure that tax exiles make a fair contribution to the Exchequer. Directors surveyed support changing residency terms to achieve this, with 75pc supporting the re-introduction of a 'place of abode' test and a further 73pc supporting the introduction of a 'centre of vital interests' test, to determine the state with which an individual has her/his closest economic ties, as criteria for determining residency for tax exiles in Ireland.