Businesses gave the Budget announced by Government a cautious welcome with some measures flagged in advance coming to fruition and the first steps taken in putting entrepreneurs on the same tax footing as PAYE workers.
Among the most important measures announced were:
- The introduction of a earned income tax credit to the value of €550 which will benefit small business owners, including small retailers; publicans; farmers and tradesmen.
- An increase in the entry point for the top rate of Employers PRSI of 10.75% by €20 to €376.
- An extension of the bank levy to 2021 from the original deadline of 2016, which will take in an additional €750m in the additional years.
- Capital Gains Tax relief for entrepreneurs which will see a 20% rate applied from January 2016 as opposed to the general rate of 33% up to a limit of €1m.
- Qualifying income for the Knowledge Development Box subject to corporation tax of 6.25%.
- Savings for retailers of €36m in reduced costs of accepting card payments.
Dublin Chamber said the reduced capital gains tax was a step in the right direction, but fell short of the reductions it had hoped to see.
“Starting or growing a young company is risky. Yet younger firms are the largest contributors of new jobs due to the inverse relationship between growth and size, according to the Central Bank. Ireland’s tax policy needs to support people who want to take the risk on real job creating investments.
“I hoped that Budget 2016 would throw open the door to entrepreneurs with an appealing tax regime for start-ups and small firms. The changes announced in Budget 2016 have opened the door, but only by a crack,” said Dublin Chamber chief executive, Gina Quinn.
Ms Quinn added that Ireland still has some way to go to rival the suite of pro-entrepreneurial policies on offer in the UK.
Deloitte tax partner, Louise Kelly said the Knowledge Development Box that has been announced will enhance the country’s range of corporation tax measures and help encourage investment in research and development.
Mr Noonan’s hands were somewhat tied in terms of how he could shape the KDB, however, as a result of the OECD’s recent BEPS report with which the tax measure has to comply, Ms Kelly added.
© Irish Examiner Ltd. All rights reserved