The Small Firms Association has called for a new 10% capital gains tax rate and said that spending on capital projects remains at dangerously low levels.
The SFA’s pre-budget submission to the Department of Finance comes as Engineers Ireland also warned about capital spending, saying the housing crisis could go on for many more years because there are too few engineers to build infrastructure.
Calling for a new 10% tax rate for entrepreneurs, the SFA highlights the shortfalls in capital spending.
“The Irish economy is starved of investment. Years of under-investment, coupled with Ireland’s growing population, is leading to serious bottlenecks in transport, education, broadband, housing and other public infra- structure,” said chairman AJ Noonan.
“Capital expenditure must reach 4% of GDP as soon as possible and investment must be targeted strategically,” he said.
In seeking a reform of the tax codes, the SFA has again called for what it describes as an end to discrimination against the self-employed, by scrapping a 3% USC surcharge.
Its proposal for a new 10% capital-gains tax would encourage business owners to invest again when they sell their businesses, the SFA said.
It said that the exchequer would not lose out from any such tax cuts because increased economic activity would boost revenues.
The body also wants to reduce the marginal rate of tax and seeks a review of the amount employers pay in PRSI.
On infrastructure, the SFA seeks better rural broadband, public transport, regional motorways and spending to end housing and training shortages.
Separately, Engineers Ireland registrar Damien Owens said that the country needs to produce more engineers, if the Government’s housing investment is to work.
“The upturn in student interest in construction- related courses is extremely positive, but the economic demand for engineering skills in this area continues to totally outstrip supply,” said Mr Owens.
“Ireland must rapidly increase the rate at which we are producing engineers,” he said.
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