Drop Planned Tax Hikes, IBEC Urges Irish Govt
09 July 2013
Posted by: Author: Jason Gorringe
Author: Jason Gorringe
The Irish Business and Employers Confederation (IBEC) has called on the Government to scrap EUR500m (USD641.3m) worth of planned tax hikes and signal that an end to austerity is in sight.
According to IBEC's Budget 2014 submission, further tax increases would undermine growth and set back the economic recovery.
Commenting on the submission, Chief Executive Danny McCoy stressed that as the "economy and Irish workers are taxed enough, the focus should be on ways to reduce the tax burden."
In particular, IBEC is clear that employment costs must not go up. Any attempt to introduce a statutory sick pay scheme or increase health insurance premiums would only "push already struggling firms out of business and fuel the unemployment crisis."
McCoy believes that "despite progress, the recovery remains fragile," and "an ambitious growth strategy and a tax system that supports investment and activity in the domestic economy" is required.
IBEC is keen to see the lower value-added tax (VAT) rate for hospitality and related items retained, along with the reduced pay-related-social insurance (PRSI) rate. These measures, which were introduced in 2011, are due to end this year.
Further changes to the tax system could should be made "to attract more foreign investment and encourage entrepreneurship." The Government should enhance the research and development tax credit scheme, by reducing the uncertainty which hinders the existing claim process, and by allowing a greater use of outsourcing and contract specialist staff, IBEC says.
"We have made significant progress in recent years, but many challenges remain. High unemployment, a weak domestic economy and ongoing uncertainty in Europe are holding us back. Budget 2014 is an opportunity to help the domestic economy return to growth and ensure Irish-based firms are ready to take advantage of the international recovery when it comes. It is vital that the opportunity is not missed," McCoy concluded.