THE GOVERNMENT should restate its commitment to a 12.5 per cent corporation tax rate and introduce measures that encourage investment in small businesses, the Irish Taxation Institute (ITI) has urged.
In its pre-budget submission, the ITI also calls for marginal income tax rates to be frozen at their current levels for the immediate future, despite the Government’s need to achieve savings to reduce Ireland’s deficit.
The introduction of a universal social contribution (USC) should not result in any further increase to the marginal rate of tax, according to the ITI.
The institute is also against lowering tax relief on pensions for marginal rate taxpayers to the rate of 33 per cent proposed in the National Pensions Framework.
Investment in Irish small and medium-sized enterprises (SMEs) should be encouraged via tax relief measures, it argues.
As an incentive to hire, employers who recruit a person who has been on the Live Register for six months or more should be able to claim half the employee’s basic social welfare payment to defray salary costs for 12 months, it recommends.
Rather than increasing tax rates for the highest earners in the State, the income tax base should be broadened. “It is not sustainable for half of our income earners to pay no income tax at all,” the submission states.
The introduction of a property tax should include a credit to recognise larger mortgages and the payment of stamp duty, while stamp duty itself should also be reformed, it adds.
Many of the ITI’s pre-budget proposals echo those of the Dublin Chamber of Commerce. However, the chamber is looking for specific measures to support SMEs.
It is calling for broader commitment to speedy payment for business suppliers, the introduction of a state guarantee scheme to provide working capital, the broadening of the Business Expansion Scheme, a new venture capital trust to provide tax-efficient equity capital to SMEs and the encouragement of start-ups by allowing the rollover of capital gains tax on the disposal of shares in a company.
