Small firms call for capital gains tax reduction

The Small Firms Association has said many of its members are still not feeling the economic upturn

The Small Firms Association (SFA) has urged the Government to bring capital gains tax (CGT) back down to 20% in general, and is seeking a three-year 10% rate for the disposal of sites with planning permission.

Its pre-Budget submission calls for an overhaul on the current 33% rate to boost investment.

It argues that it has been shown over the last 20 years that when the CGT rate drops, the Exchequer benefits due to a surge in activity, calling the proposed move a "win-win" as a result.

Eight years since recession hit, the association makes the case that SMEs continue to hurt.

The SFA says:

"This Budget comes at a time when the tailwinds that have propelled the Irish recovery over the past number of years are waning.

"While for many the fragility of the crisis years have passed, the recovery has not been consistent regionally or sectorally. Many smaller businesses are still waiting to feel the upturn."

 

 

With the most recent KBC Bank Ireland/Chartered Accountants Ireland Business Sentiment Index finding that roughly 80% of companies see Brexit affecting their company, the submission states:

"Business costs are rising, many of the fundamental policy challenges facing the country have not been addressed and the international environment in which Ireland operates is uncertain, in particular in light of the UK's decision to leave the EU."

Another concern for small firms is the rising cost of wages:

"Irish labour costs are the tenth highest in Europe and 20% above the EU average.

"Irish small firms are at a competitive disadvantage relative to firms in the UK across a number of major business costs and total labour costs are 17% higher in Ireland than in the UK."

The submission also asks for a 1% cut to the top rate of tax for workers, the abolition of the 3% USC surcharge for the self-employment, investment in rural broadband and public transport networks, and a reduced 9% VAT rate for residential house building for two years.