Ireland runs the risk of losing its attractiveness to internal and external entrepreneurs if the Government doesn’t remove certain "obstacles" to start-up firms in next week’s budget, one lobbyist has warned.
Start-Up Ireland, the nationwide mentoring and lobby group for entrepreneurs, has called for the introduction of capital gains tax reliefs and PAYE tax credits for owner-managers.
In its pre-budget submission, the not-for-profit organisation yesterday said that Ireland’s future economic growth was closely linked to the performance of the country’s start-up sector.
“Attracting international start-ups to locate in Ireland can also contribute to this,” said Eoin Costello, co-founder of Start-Up Ireland. However, Mr Costello added that a number of “unintentional obstacles” to entrepreneurial growth, here had sprung up, and the Government had “a critical role to play in addressing this”.
“We need only to look to the UK for a positive example of what can be achieved when start-up-friendly policies are implemented.”
“With many start-ups in Ireland already choosing to incorporate their business in Northern Ireland, to avail of these incentives, there is clear evidence that Ireland is at a competitive disadvantage,” he added.
In the budget, Start-Up Ireland wants PAYE tax credits made available to entrepreneurs, something not available to start-up founders. It also wants employee ownership schemes made more practical and a similar capital gains tax (CGT) treatment to the one in Britain introduced.
“Both the founders and investors behind start-up companies hope to derive the majority of their long-term income from the disposal of their shares in the company.
“However, capital gains tax reliefs at 33% acts as a disincentive to investment.” Ireland should implement a progressive scheme similar to the UK’s Entrepreneur Relief Scheme by applying a lower rate of 10% CGT on the first €12.5m earned from investments by founders of start-ups,” it said.
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