Monday 29 December 2014

SFA: Small firms calls for cut in entrepreneur CGT to encourage SME investment

SFA annual conference also calls for reduction in personal tax rates in a bid make working more attractive

Published 27/05/2014 | 07:07

Keith Wood
Keith Wood
AJ Noonan SFA chairman

THE SMALL Firms Association has called on the government to reduce the rate of Capital Gains Tax for entrepreneurs from the current 33pc in a bid to encourage investment in the sector.

"Taxation on capital and work is too high and completely out of sync with competitor economies," said AJ Noonan, chairman of the SFA at the body's annual conference.

He called for a reform of GCT for and the introduction of a 20pc rate for entrepreneurs to make it competitive with the UK offering and to encourage reinvestment in small businesses.

While the Government has put CGT entrepreneurial relief plans in place, they are subject to EU state aid and have yet to be approved.

Mr Noonan added that employment in the sector will only increase if a range of radical changes are introduced including finance, taxation and public procurement.

SME employment accounts for about seven out of 10 jobs in the economy but while entrepreneurship is alive and well, he said, it must be nurtured.

"Despite the horrendous impact in the years since 2008, there are still 200,000 small firms in Ireland, employing 655,000 people.

According to the SFA's Spring Business Sentiment Survey, employment was maintained or increased by 93pc of respondents while productivity was up or maintained in 96pc of cases.

Small business sentiment continues to improve, the survey also showed.

However, Mr Noonan added that personal tax rates need to be addressed to make working more attractive.

"When a single person hits €32,500 in salary they get hit with the higher rate of tax.

"The incentive to work is not there. Risk must be awarded."

Over 300 delegates are attending the SFA conference today at Dublin's Clyde Court Hotel - the theme is top priorities for SME success.

Speakers include businessman and former rugby international Keith Wood, McDonald's managing director Adrian Crean and Larry Murrin of Dawn Foods.

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