The Irish Business and Employers Confederation (IBEC) has called on the government to provide new legislation in October’s budget to help indigenous businesses to grow.
Its Budget 2020 submission also calls on the state to adapt more quickly to the fast-changing labour market and to help businesses prepare for Brexit.
The organisation, which is the third biggest lobbying group in Europe, claim that the budget could be the most important in a generation. It warns that Brexit, global tax policies and a rising population are just some of the major threats facing the current Irish economy.
Speaking about the submission, IBEC’s Director of Policy and Public Affairs Fergal O’Brien, said: “Ireland’s business model, which has transformed the country over the past six decades, is facing into a period of significant challenge.
“The global trading environment is becoming more difficult for small open economies, and Ireland’s relationship with our nearest neighbour is changing irrevocably.
“Budget 2020 must deliver on measures to grow our indigenous enterprise base. This includes an intense focus on productivity, innovation, skills and exporting early.” He said.
IBEC’s submission warns that an overreliance on larger multinational firms for tax revenue could leave the country vulnerable due to the OECD/G20’s new Base Erosion and Profit Shifting (BEPS) initiative.
“Given the wide range of imbalance and uncertainty in business, personal and environmental tax, we also think that it is time for Government to set up a new Commission of Taxation to ensure that the tax system is sustainable in the decades ahead." O'Brien added.
The organisation called on the government to provide greater support for ingenious business through changes in tax policy. These changes include overhauling R&D Tax Credits to reduce recordkeeping requirements, administrative costs and to bring the existing limit in line with the UK’s tax credit system. IBEC’s submission also asks for alterations to Capital Gains Tax, the Employment Incentive and Investment Scheme and the Key Employee Engagement Programme so that they form part of a cohesive plan.
A separate report published last week by the Organisation for Economic Co-operation and Development (OECD) found an increasing gap in the productivity levels of Irish-owned companies and their multinational counterparts.
The report also found that less than seven per cent of Irish SMEs currently export their products or services – a figure lower than the European average. A large majority of that seven per cent figure currently only export to the UK.
To tackle the problems facing the economy, the OECD has worked alongside the government to come up with an SME and entrepreneurship strategy. The strategy includes boosting technology training through Skillnet and encouraging greater links between SMEs and multinationals.
Government agencies, such as Enterprise Ireland and InterTrade Ireland, will also become responsible for helping SMEs scale up their business through grants and vouchers.
Along with the threats of Brexit, small business owners in Ireland also face higher bank charges than many of their European counterparts. A Central Bank report published last Friday showed that charges have risen from 4.21% last year to 4.26% in 2019.
PIcture source :Pixabay