SFA lobbies for tax relief changes

The Small Firms’ Association is to lobby Finance Minster Michael Noonan on the introduction of tax relief changes to prompt business owners into making further investments.

Speaking ahead of the body’s annual conference today, SFA chairman Ian Martin said: “We believe that tax changes to support investment and jobs will be most important in contributing to growth going forward.

“Specifically, we will be proposing to the minister for finance that in Budget 2013, he introduces a ‘roll- over’ type relief, which would provide an incentive for entrepreneurs selling a business to invest some of its proceeds in other enterprise activity.

“We also propose that those individuals with additional voluntary contribution pensions and personal pensions held by self-employed individuals, be allowed to early release a proportion — up to 25% — of their funds to invest in their businesses and for spending in the broader economy.”

According to Mr Martin, the total draw-down value of such a programme would be around €3bn, “with an immediate tax windfall for the exchequer of €600m”.

Meanwhile, the results of a poll of SFA members shows that job creation, credit availability for small firms and the personal debt crisis are the three key areas needed to be tackled in order to restore consumer confidence.

On the latter issue, 91% of the SFA’s membership believe realistic measures taken to tackle the personal debt crisis, will also lead to a substantial improvement in consumer confidence.

A halving of Ireland’s unusually high net savings ratio reading of 10% would also, according to the SFA, “release a vital €1bn into the domestic economy”.

Similarly, over 90% of members still believe that an increase of credit availability from the banks to the SME sector is critical.

Mr Martin said while the Government’s micro-finance fund and loan guarantee scheme programmes are to be welcomed, “sustained progress by the two pillar banks in meeting their €3.5bn lending targets this year”, has to be seen.

He also advocated “a defined Government policy for introducing more competition into the SME marketplace, to solve the dual problems of availability and, increasingly, the cost of finance”.