In her end of year statement, Sue O’Neill, Chair of the Small Firms Association (SFA), the Ibec group that represents the sector, said: “2017 has been a challenging but successful year for small businesses. Brexit, wage inflation and increasing business costs are the main obstacles for small businesses in Ireland. However, as the year draws to a close, nearly two thirds of small firms feel that the business environment is improving.
“Domestic economic growth in 2018 is likely to be close to 4% and our members see this as the biggest opportunity for their business in the coming year. 71% of SFA member companies plan to take on additional staff and we estimate that together small businesses will create 25,000 jobs in 2018. These jobs will be in a wide variety of sectors, giving a boost to villages, towns and cities across Ireland.
“However, concrete steps are needed from Government in order for this job creation to be realised. Creating a strategy for growth for small businesses with special focus on tax competitiveness and the cost of doing business especially in light of Brexit should be the top priority in the coming year. By creating a real pro-growth tax system and making sure that work always pays, employees, small businesses and society as a whole will be better off.”
A strategy for growth needs to include clear measures to increase the tax competitiveness such as:
· Full equalisation of the Earned Income Tax for the self-employed with the PAYE tax credit
· Increase of the entry point to the marginal income tax rate as well as the reduction of the marginal rate to below OECD average
· Reduction of the Capital Gains Tax rate from currently 33% – the fourth highest in the OECD – to 20%
· Increase the €1 million limit for the Entrepreneurial Rate of CGT to €15 million
In conclusion, O’Neill stated: “The SFA has a vision of Ireland as the most vibrant small business community in the world, supporting entrepreneurship, valuing small business and rewarding risk takers. With a strong Government focus on tax reform and competitiveness, Ireland’s 245,000 small businesses can create 25,000 new jobs in 2018, reinvigorate towns and villages around the country and make a significant contribution to the Irish economy.