Chamber urges income tax credits boost for pension contributions

WORKERS should be given an income tax credit at the 42% rate for the first €4,000 a year in pension contributions, Finance Minister Brian Cowen has been urged.

Cork Chamber of Commerce, in a pre-Budget Submission to Finance Minister Cowen, said the Government must move to make it easier for workers to take the initiative to provide their own pensions.

Chamber Budget Task Force chairman Damian Riordan said that one of the critical matters in framing Ireland’s long term structural competitiveness is the need to transfer the initiative on future pension provision from the State to the individual.

“The Chamber proposes that all individuals, irrespective of their marginal tax rate, are granted a tax credit at the 42% rate for the first €4,000 of annual pension contributions.

Mr Riordan said it was imperative that the State’s role changed to being the provider of financial incentives for the individual to take on the provision of their own pension.

“This measure has merit in being targeted at the lower paid in general and at encouraging the commencement of private pension provision by the younger/lower paid in particular,” he added.

The Chamber also urges the Government to implement the findings of Enterprise Strategy Group to further develop National Competitive Advantage

“The Chamber supports and endorses the recommendations of the Enterprise Strategy Group Report on providing an annual budget of €20m over 5 years towards enterprise led interventions in the area of training and upskilling within the workforce. This money would be diverted from existing enterprise development agency resources,” Mr Riordan said.

The Chamber would also like to see improvements to the capital allowances available for childcare facilities and the removal of benefit-in-kind tax charges where the employer contributes to the cost of childcare.

“It is estimated that in Cork, 42% of businesses believe that the lack of available childcare impacts on their ability to retain and recruit staff. Two reasons for this are the high cost and lack of availability. These improvements are designed to improve the supply of quality affordable childcare places and facilitate employers who wish to help their employees in this area,” he said.

The Chamber Budget Submission also called for a reduction on the excise duty on beer to British levels.