Monday 24 June 2019

Enterprise Ireland chief says UK better for startups

Enterprise Ireland CEO Julie Sinnamon. Photo: Arthur Carron
Enterprise Ireland CEO Julie Sinnamon. Photo: Arthur Carron
Gavin McLoughlin

Gavin McLoughlin

Ireland has fallen behind the UK when it comes to creating an attractive tax environment for starting a business, according to Enterprise Ireland CEO Julie Sinnamon.

Ms Sinnamon - head of the state agency tasked with developing Irish businesses - said the UK has a "more attractive package of incentives" than Ireland, adding that a strong offering in this area would help "further accelerate the growth of Irish companies".

She said she recognised the Government's intent to make changes in this area, including a plan to boost capital gains tax relief for entrepreneurs by increasing the amount of gains that would be taxed at a reduced rate.

The capital gains tax regime is one of the areas that have received criticism from entrepreneurs, alongside the tax treatment of share options. A new regime for certain share option schemes was introduced in last year's budget, but was criticised as overly restrictive and then tweaked in this year's budget after a low level of take-up.

The development of Irish firms is increasingly in the spotlight amid increased threats to our FDI regime, ranging from multinational tax reform, to US President Donald Trump's overhaul of the US tax code aimed at bringing business back to that country.

"We have long said that the emphasis on foreign direct investment in Ireland is too great. We have long called out the universal political failure to embrace the contribution that small enterprise makes to Ireland. We have long said that focus is required on indigenous enterprise," said Ciaran Murtagh, chairman of the Irish Small and Medium Enterprises Association at its annual conference yesterday. "We need to accept that the way we've managed industrial policy since the TK Whitaker era has to change, and we need to pivot industrial policy towards indigenous enterprise," he added.

Earlier this week, the National Competitiveness Council (NCC) warned that most Irish firms are seeing their productivity shrink, with a small number of big companies, working in largely foreign-dominated sectors, masking the underperformance of smaller companies who account for most of the employment in the State. The NCC said a "major effort" was needed to help Irish businesses invest in innovation.

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