Small Firms Association calls for 20% capital gains tax rate in budget

The Small Firms Association (SFA) has urged the Government to introduce a “no-nonsense” 20% capital gains tax for existing companies in the October budget, as a means of encouraging entrepreneurs and small business owners to reinvest in their own or other ventures.

Addressing delegates at the organisation’s annual conference, in Dublin, yesterday, SFA chairperson AJ Noonan said Ireland should adopt a rate closer to the UK’s 10% mark to encourage people to reinvest their gains.

“How are we expected to create wealth when capital taxes are among the highest in the OECD never mind the EU?

“The upcoming budget must also encourage people to reinvest their gains; a capital gains tax of 33% does exactly the opposite and reduces the number of transactions. What is needed is a simple no-nonsense 20% capital gains tax rate for existing companies,” Mr Noonan said.

“The leitmotif” of government policy statements has been “it’s all about jobs!

“How can this position be squared with increases in public sector pay and a Low Pay Commission which is told by the minister in a public statement that the minimum wage will increase, even before the Commission has held its first meeting,” Mr Noonan said.

He said this is the time to invest in the future, not to burden ourselves with price and wage increases, which will hinder the recovery and and “cost jobs”.

The SFA’s latest business sentiment survey — published to coincide with yesterday’s conference — found more than 70% of SMEs feel their business is improving, while 64% intend to hire new staff this year. However, it also found that just 41% can afford to increase staff pay.