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By Chamber Press Office, 24 September 2019
The upcoming Budget is the opportunity for the Irish government to show that it is serious about competing with the UK’s attractive tax regime for entrepreneurs, according to Dublin Chamber.
The Chamber, presented on Tuesday 24th September to the Oireachtas Committee on Budgetary Oversight, urged the Government to commit to raising the lifetime cap on qualifying gain for Entrepreneur Relief from €1m to €15m to send a strong signal that Ireland intends to compete with the UK ahead of Brexit.
By prioritising this move in the upcoming budget it will encourage greater ambition and scaling by our entrepreneurs, the Chamber told the Committee.
Speaking at to Committee, Dublin Chamber CEO Mary Rose Burke said: “It is time for a step-change in terms of what the Government is doing to encourage and support indigenous enterprise and entrepreneurs. Irish entrepreneurs have had to look on enviously over the past decade as the UK has rolled out the red carpet for burgeoning business, with consistent tweaks and improvements to their tax regime. Ireland has been too slow to react, resulting in our nearest neighbour – and biggest competitor – being allowed to steal a march. With Brexit on the horizon, it is vital that we react and fight back.”
Ms Burke said: “Budget 2020 needs to bring changes to our Capital Gains Tax regime. Currently, Ireland’s Capital Gains Tax rate is the third highest in Europe. We know we have a problem when the same tax is paid on passive investments in large blue chip multinationals as is paid on high-risk Irish startups. This is not only inequitable; it effectively incentivises investment in larger foreign firms over investment in Irish SMEs.
“Long-term we want the Government to move towards a 20% rate of Capital Gains Tax for all unlisted trading firms, a move which the UK has already taken with its own SME base in mind. Dublin Chamber is conscious of the potential significant exchequer implications of such a move in the short-term, which is why we have also outlined a number of targeted measures that could be introduced this year,” said Ms Burke.
Dublin Chamber has also called on the Government to outmatch the UK on Capital Gains Tax Entrepreneur Relief. “Ireland’s offering at present is starkly uncompetitive, imposing a lifetime cap of €1 million, as opposed to £10 million in the UK. By raising the lifetime cap on qualifying gains to €15 million we will send a strong signal that Ireland intends to sharpen its competitive edge in the face of Brexit,” said Ms Burke.
“We have also proposed changes to the R&D Tax Credit, the taxation of entrepreneurs’ dividends, and the key Employee Engagement Programme. This budget, the last before the UK’s exit from the EU, offers an opportunity for Ireland to demonstrate serious intent about business competitiveness versus the UK.”