The Minister for Finance Brian Lenihan T.D. today (4th February, 2010) published the Finance Bill 2010 which gives effect to the taxation measures announced in last December’s Budget.

See here for more details

Finance Bill does not Support Indigenous Business

Tweaking Tax of Little Use Considering Credit Issues– CPA 

The Finance Bill contains little to support indigenous business and shows government to be out of step with the day to day realities of indigenous business, says the Institute of Certified Public Accountants in Ireland (CPA).

Commenting on the publication of the Finance Bill, CPA President John White commented, “the main focus of the Bill was to enact a budget that focussed on cutting public expenditure and stabilising the budget deficit. When, it comes to creative measures to support Ireland’s struggling business community however, the bill is found to be lacking.

"There is no provision for changes to the PRSI regime, which is a significant burden to employers and acts as a deterrent to taking on a new staff.

"The introduction of carbon tax is also a negative, increasing energy costs and adding to an already spiralling cost base.

"What use is the extension of the scheme of tax exemption on the income and gains of new start-up companies if there is no credit available to them? Our clients are reporting zero access to credit from banks. Tweaking of taxes is of little use if this is not addressed.”

White continued, “Positives elements to protect foreign direct investment such as amendments to the existing R&D credit allowance, Corporation Tax rate remaining at 12.5% and enhancements of the remittance scheme for higher earners are welcome. However these are merely changes to existing measures and show an alarming lack of any long term strategy with regard to supporting Irish business and restoring competitiveness in an international context. We have to disagree with the Minister’s assertion that this Bill provides targeted support to enterprise.”‘

Earlier this week CPA welcomed the announcement by the Minister of Enterprise Trade & Employment that she is to bring forward a proposal to a Cabinet sub-committee that would see the State guarantee funds lent by banks to small businesses. White said that the structure of the state guarantee scheme for loans to SME must be to support viable new businesses and the growth of existing businesses in the SME sector.

“CPA Ireland has strongly advocated on the need for government support to assist our entrepreneurial sector with the equity and guarantee requirements that banks are now seeking from businesses looking to secure working capital finance. Such assistance is required to ensure that new business and growth of existing businesses in the SME sector is sustainable” he concluded.

See also

Bill offers little support for business - CPA Irish Times 05/02/10

FGS Finance Bill 2010 commentary