Chambers: Keep on austerity path

Outsourcing back-to-work initiatives, cutting capital gains tax for entrepreneurs and reducing the level of council rates in town centres are just some of the initiatives contained in the Chambers Ireland pre-budget submission.

However, despite an admission that consumer demand remains extremely depressed, Chambers Ireland is not calling for an end to austerity.

In a preface to its pre-budget submission the group, the umbrella body for all the chambers of commerce, said: “While some have been calling for an end to austerity we believe that Government has little choice but to maintain its focus on restoring balance to the exchequer finances, while creating confidence and taking measures that support activity levels wherever possible.”

The chief executive of Chambers Ireland, Ian Talbot, called on the Government not to introduce any new taxes in budget 2014, a move which he said will boost employment.

“After a peak-to-trough decline in demand of 20%, the highest in the eurozone, an increase in demand will stimulate growth and employment and build consumer confidence.

“The best way to achieve this through Budget 2014 is by introducing no new taxes beyond those already announced. The sooner the Government gives certainty on this issue the more likely we are to see the positive effects,” he said.

The body called for a retention of the 12.5% corporate tax rate as well as maintenance of the 9% Vat rate for the hospitality sector, both of which are described as essential.

The body did call for special capital gains tax breaks for entrepreneurs, who it claims are taking a bigger risk in setting up a business than an investor who is taking a punt on stocks.

“We believe that capital gains tax should be reduced significantly to 16.5% for entrepreneurs, to incentivise and reward risk-taking, both on business assets and business share disposals. It could also grow capital gains tax revenues and enhance opportunities for growth and ‘scalability’ as some entrepreneurs could be further incentivised to sell their businesses as they approach retirement to other companies/entrepreneurs seeking to grow,” the submission said.

On the issue of employment the body pointed to evidence from the UK and Australia which showed that private enterprises are more successful at delivering employment programmes.

“Government should give consideration to ‘outsourcing’ employment programmes, whereby the companies with responsibility for delivering the services receive payment by results. Evidence provided by G4S shows how such schemes have been successful in other countries,” the submission said.

The submission also called for employers to be given tax relief on creche facilities. Currently if an employer offers to contribute towards childcare costs it is taxedas a benefit-in-kind. The body is calling for this employment perk to be treated differently and be subject to tax relief.

Chambers Ireland also looked at the plight of the retail sector, calling for a reduction in rates for town centre businesses and a double rent reduction for those retailers trapped in upward only rent reviews.


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