Munster Express Online

Budget 2016 should be viewed as an opportunity to reinforce Ireland’s growth, generate a new energy amongst our indigenous industries, and insulate the economy in so far as possible from internal and external risks, according to Waterford Chamber.
Through a series of targeted tax adjustments that will have a limited impact on the exchequer, Waterford Chamber believes entrepreneurs and small businesses can begin to thrive:
* Our tax structures should recognise and reward the risks taken by entrepreneurs in establishing businesses and creating employment. In order to encourage and support entrepreneurs and investors, the USC for self-employed earnings over €100,000 should be brought in line with that of PAYE workers (currently at 11% vs. 8%).
* The Government should introduce a tax credit similar in size to PAYE workers (€1,650) to be made available to business owners and the self-employed. The Government should also introduce voluntary opt-in social welfare protection for owner-directors and self-employed, that will entitle them to social protection should their business fail.
* Given the long term commitment to reduce USC rates, in order to promote tax transparency, we suggest merging income tax and USC into a single income tax.
* PAYE workers earning above €33,800 p.a. are faced with a rate of tax of 52%, and the self-employed are faced with a tax of 55%). We believe that bringing the rate below 50% will stimulate entrepreneurship, improve our international competitiveness and make Ireland an attractive location for highly skilled workers.
* A methodology to link employee remuneration directly with increased company productivity and performance would mitigate the potential erosion of competitiveness arising from general increases to wages. This could be achieved through incentivising employee share ownership schemes.
* We advocate reducing the Capital Gains Tax rate to 20% for non-passive investments to incentivise investment and reward entrepreneurship. This would have implications for Exchequer revenue stemming from active capital investment. However, we believe that the impact of a reduced rate on non-passive investment will considerably outweigh any revenue loss and ultimately be self-financing given increased investment and potential for job creation.