Budget Special – Reactions in business
“As a provider of food services to over 250,000 people every day, we welcome the retention of the 9% Vat rate.
“The foresight of the minister in reducing Vat in last year’s budget directly led to job creation across the sector. In Aramark, 200 jobs were created in the past 12 months which I can directly attribute to the introduction of the 9% Vat rate.
“In Aramark we employ over 4,000 people across the island of Ireland. That the minister has not increased PRSI, PAYE, or the Universal Social Charge is significant. Not increasing the cost of employment helps private enterprise create jobs.
“More importantly, it maintains certainty for taxpayers and gives them security in terms of their tax obligations. I have no doubt that the tax burden on lower income earners — those earning €35,000, for example — is too onerous and is a contributor to many young people emigrating.
“By maintaining current tax rates, it will hopefully stimulate more people to remain in Ireland. The Government must look at the tax bands so those on lower incomes are brought into the tax net at a later stage.
“To some degree it is a missed opportunity not to have done so in Budget 2014.
“I also welcome the focus on supporting those who have been unemployed for over 15 months to create their own businesses. The minister said he was introducing 25 pro-business and pro-job measures in the budget and there is no doubt that job creation is the holy grail if we are to restore confidence and get the economy well on the road to recovery.”
“It’s gratifying to see that Ireland is in growth mode, creating 3,000 jobs per month and nearing a successful exit from the EU/IMF bailout.
“The construction industry needs stimulation and I’m glad that Nama funds are being designated for both housing and commercial property projects.
“I’m delighted that the Government has also allocated a significant proportion of the proceeds from the National Lottery sale to help fund major construction initiatives; including a new training arena at the National Sports Campus, road maintenance and repair works, and the development of a new multi-functional events centre in Cork. The €10m for unfinished housing estates and a further €30m to recommence the State House Building Programme will provide a further boost.
“The measures brought in to stimulate new business and SMEs are welcome. I’m also glad to see the commitment to FDI investment, particularly its full commitment to the 12.5% corporation tax rate.
“The industry’s call to enable homeowners to reclaim the Vat incurred on costs associated with renovation and upgrades has been recognised as a measure for dealing with the shadow economy. There is no place in the sector for shoddy practices and I also welcome the resolution of the Priory Hall matter.
“BAM is involved in several large Public Private Partnership projects — three completed and two which are under way. The minister’s commitment to using the PPP model is welcome, particularly with the announcement of the flagship Grangegorman project.”
“The budget goes some way to answering recent criticism of Ireland’s labour policies by the OECD which criticised the significant amount of money spent on passive labour market such as income support — rather than active policies that try to get people into or back into the labour market.
“As an entrepreneur I welcome the much-needed measures to promote entrepreneurship and in particular the new Start Your Own Business Scheme which provides those who have been unemployed for over 15 months with a two-year income tax exemption if they set up a non-incorporated company. This should help remove one of the primary barriers to self-employment for those currently drawing unemployment benefit.
“Removing the Employment and Investment Incentive from the high earners restriction for a period of three years will also provide certainty to entrepreneurs and will encourage greater investment in new enterprises.
“We have to continue to provide supports to SMEs, particularly those which are creating and maintaining jobs. We have seen the impact of the introduction of the 9% tax rate on the tourism sector where 15,000 jobs were created last year and we need to continue such innovative measures.
“In particular allowing SMEs that outsource their R&D to benefit from tax credits is to be welcomed. &&&
“From an SME perspective, not increasing excise duty on petrol and diesel will have a significant impact on the cost of doing business, while maintaining the status quo on VAT, PRSI, Income Tax and the USC will encourage additional employment in the coming year.”
“While the budget measures are somewhat unpalatable; they represent an important continuation of the steps we need to take to address the imbalance in the country’s public finances and reign in the Budget deficit.
“In a welcome development, Finance Minister Michael Noonan referred to 25 pro-jobs initiatives. Of these, a package of measures to encourage people to start their own businesses and stimulate entrepreneurship, innovation, and investment is probably the most significant.
“The series of measures announced, under a Build Your Business Initiative, include:
*A relief from capital gains tax, in the form of a tax credit, for entrepreneurs who re-invest the proceeds from the disposal of assets into a new investment in trading activities;
*The key recommendations of the R&D tax credit review will be implemented to improve a number of the provisions — notably, the availability of credit for outsourcing expenditure;
*A new start-your-own business scheme for individuals who have been unemployed for at least 15 months is being introduced and will provide a two-year exemption from income tax;
*To encourage individuals to invest in businesses up to the maximum permitted under the Employment and Investment Incentive Scheme (currently €150,000), the income tax relief is being removed from the ambit of the high earners restriction for a period of three years;
*The threshold for the cash receipts basis of accounting for Vat will be increased to €2m from May1, 2014. This should have cash flow benefits and reduce administration for a greater number SMEs.
“Additionally, a home renovation stimulus scheme, providing an income tax credit for certain renovation works, is proposed and will provide a much needed boost to employment in the construction sector.
“Separately, the Government is in talks with the European Investment Bank on a trade finance initiative to support exporters in growing trade abroad.”
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