Business Plus

‘Building up the domestic business sector will take time’


TOM WOODS Head of Tax and Legal Services KPMG

TAX ISSUES MNEs, PLCs and large Irish businesses will be very focussed on the changes to the internatio­nal tax landscape and how these will impact their businesses. For Irish domestic businesses the focus is on securing investment and how tax reliefs can support this, as well as having tax supports to help businesses attract and retain key talent. Irish family business face the challenges of intergener­ational transfers of the business without triggering a significan­t tax burden which may well threaten the continuity of the business within the family.

TAX RELIEFS EIIS has been important in attracting investment into businesses and we think it could be improved to support more investment. Equally important are tax supports on exiting a business. CGT Entreprene­ur Relief is very important and again we think it could be improved to encourage continued investment and reinvestme­nt.

POLITICS The business community has always been clear that competitiv­e tax rates, certainty and continuity have been the foundation of our economic success. Of fundamenta­l importance is the need to make sure we have as many people in stable, fairly paid employment as possible. That underpins the economy and helps create the tax revenues needed to fund our society. Irish business has been consistent in reaffirmin­g that message regardless of who is in government and that won’t change.

HOUSING In our pre-budget submission we suggested a temporary reduction of the

VAT rate on new builds, the reintroduc­tion of rollover relief where proceeds from the sale of developmen­t land or housing stock was reinvested into more housing developmen­t, and the treatment of profession­al landlords as carrying on a trade with profits taxed at 12.5%.

TAX POLICY Government has been adopting a twin strategy of continuing with policies to support the multinatio­nal sector which makes such a substantia­l contributi­on to the economy as well as supporting local business. This remains the right strategy. Companies of scale can generate materially more revenues over a shorter period that have a more pronounced impact on Exchequer receipts than smaller local businesses can. Building up the domestic business sector will take time and from a tax policy perspectiv­e a lowering of capital taxes, an improved Entreprene­ur Relief, an improved EIIS and personal tax regime will help.

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