The Irish Small and Medium Enterprises association (ISME) has called for a new 10 per cent income tax rate for the self-employed in an effort to stimulate small business in Ireland.
In its pre-budget submission, ISME said the "disproportionate low level of start-up and small businesses in Ireland compared to other OECD countries" needed to be tackled.
In a statement the association said it agreed with those calling for a balanced budget. But it warned this should not be achieved on the back of the small-business sector, which it says has been the employment-creation engine in recent years.
ISME said: "The Government must now prune its day-to-day expenditure and cut its cloth to its measure. The biggest item is the public sector pay bill which next year is expected to grow by 17 per cent".
ISME proposes outsourcing those parts of the public service that could be more efficiently done by the private sector.
It also proposes allocating fixed departmental budgets that will increase in line with GNP or inflation - whichever is lower.
The ISME also called on the Goverment to introduce an administrative payment as compensation to employers for their work as tax collectors. It said: "Businesses should be empowered to retain 4 per cent of their companies' tax returns".
