SFA: Tax report is 'a road-map for reform'

The Small Firms Association has welcomed the Commission on Taxation Report, saying it "should give the Government a road-map for tax reform".

The Director of the Small Firms Association, Patricia Callan, said: "It is comprehensive in nature, and should give the Government a road-map for tax reform in the coming years to ensure that the tax base is broadened and that our overall low-tax base vision is maintained, which is key to indigenous enterprise development.

"It is critical that the tax system is designed to maximise the rewards for risk and for labour, whilst at the same time giving the government a more stable tax base going forward."

Ms Callan specifically welcomed the proposed measures to support business, in particular the proposed change in the rate of taxation on the disposal of assets used for trading purposes to the corporation tax rate rather than the higher capital gains tax.

Ms Callan said: "This had posed a barrier for those companies seeking to expand and reinvest in their businesses."

Ms Callan also welcomed the proposals to allow companies to offset their R&D tax credit against their employer PRSI costs, as "the current system means you have to be in profit to benefit from the scheme, which most early stage high-tech companies are not, whilst the major overhead is salary costs for highly trained researchers, and thus they will benefit in real time by being able to reduce their employer PRSI overhead.

"The support for the continuation of the Business Expansion and Seed Capital Schemes was also welcomed by the Small Firms Association, as being “essential sources of capital in the continuing difficult funding environment."

However, she warned that "the balance in addressing the current fiscal imbalance will have to be on the side of public expenditure cuts, and not through increasing the tax take, as this would further damage consumer and business confidence, both domestically and internationally".