Call for export-orientated tax plan

THE GOVERNMENT should introduce a special tax regime aimed at encouraging more entrepreneurs to establish export-orientated companies, the Irish Exporters’ Association (IEA) has recommended.

As part of its wide-reaching pre-budget submission, the IEA is looking for Finance Minister Brian Lenihan to “ease the burden of personal risk on prospective export entrepreneurs through tax structures that reward entrepreneurial sacrifice”, in December’s budget.

Special income tax status to founding members of export companies in the early stages of the business has also been called for by the IEA, as has a fund that can be used to assist the development of services companies wishing to expand their sales overseas.

Commenting on the IEA’s wish-list, the body’s chief executive John Whelan said: “With domestic demand expected to continue extremely weak, the tentative signs of recovery in international markets is very welcome, and confirms that export-led growth represents the most likely source of recovery for the Irish economy.

“However, to ensure that we can benefit from the global recovery, competitiveness must be restored in the economy as a whole, and this December budget was a key opportunity, and one not to be fudged, in restoring this competitiveness.”

The IEA also wants a 20% cut in energy costs for industry – Ireland has the highest rates for businesses of any EU member state – before the end of this year. The organisation has also re-iterated its stance that Ireland should have a state-backed export credit insurance scheme. This is something the IBEC-affiliated Food and Drink Industry Ireland (FDII) also called for last week, on the back of latest CSO figures showing a 6% fall in export values from Ireland inAugust.

Regarding labour costs, Mr Whelan said: “Labour costs in the private sector are currently too high compared to that in competing countries and will require reduction immediately and then a period of at least two years of zero growth to return to international competitiveness. To assist in this painful adjustment by the private sector, the minister must not increase income tax in the December budget.”