Calls for capital gains tax to be cut for entrepreneurs

A halving of the 33% capital gains tax (CGT) rate for entrepreneurs would support new business creation and incentivise risk takers, Chambers Ireland has said.

Despite the Government upping the CGT rate — from 30% to 33% — in December’s Budget, Chambers Ireland yesterday called for a rate of 16.5% to be applicable to entrepreneurs. The measure forms part of its alternative ten-point plan for micro, small and medium- sized enterprises, which it launched yesterday.

Chambers Ireland chief Ian Talbot said that the need for an alternative tax plan, to that set out in Budget 2013, is because the Government’s measures “lacked the necessary ambition to create transformative change”.

“The measures suffer from a number of problems — too many are sector specific, too many impose unnecessary limitations and too many are little more than extensions of existing schemes,” he added.

Mr Talbot said that, if implemented, Chambers’ policies could help businesses and, in turn, stimulate job creation.

“For example, a reduced Vat rate on housing repair, maintenance and improvements would not only incentivise start-ups and create employment in the construction sector, it also has knock-on benefits for other sectors such as soft furnishings, white goods and electronics,” he said.

Chambers’ plan also calls for the introduction of further operational initiatives to promote business interests; a mandate for all government research funding agencies to set aside 2.5% of their budget for SMEs; a double rent deduction for companies with upward only rent reviews; and allowance for start-up firms to offset corporation tax against other taxes due.

The introduction of a targeted rates reduction for businesses located in town centres would, according to Chambers Ireland, “support existing employers — many of whom are in relatively low margin, but high employment, businesses”.

Meanwhile, addressing the Committee of the Regions conference in Brussels yesterday, John Perry, the minster for small business said that SMEs are “fighting back in the face of very challenging odds and they are beginning to win”.