Overhaul of tax regime needed as SME sentiment slumps, says ISME
Ireland needs to initiate a sweeping overhaul of its business and personal tax regime in order to tackle efforts by the UK to boost its business credentials in the wake of the decision to leave the EU, according to one of Ireland's biggest business groups.
ISME, which represents small and medium-sized businesses across Ireland, said that there has been a sharp reduction in business confidence among its members since the Brexit vote.
Ten of 12 economic indicators it tracks have been negatively impacted, wiping out gains that were made last year.
Some 60pc of ISME's members surveyed for its latest quarterly business trends survey said that the UK's exit from the EU will have a negative effect on their bottom line. Just 32pc think it won't have any impact.
Indicators in the survey for business confidence, expectations, employment prospects, future sales and future exports all tumbled.
ISME chief executive Mark Fielding said that the Brexit shock coupled with the slump in Sterling have added to the cocktail of rising business costs, difficulties in accessing bank payments, and late payments to businesses, in damaging SME confidence.
"Ireland must remain a top location for foreign direct investment and a strong location for our indigenous enterprises from which to trade locally and internationally," said Mr Fielding.
"With these new external factors to be overcome, Irish businesses cannot compete effectively on the international stage, if they are forced to pay wages, rents and utilities that are far higher than international norms. Competitiveness is the goal, productivity the measure and survival the result," he added.
ISME has demanded that the Government establish a dedicated unit within the Department of Jobs, Enterprise and Innovation to coordinate activities to counter the Brexit impact.
It has also called for a new job activation scheme to be implemented in conjunction with employers, and for further reform of the social welfare system to make it more profitable to work and reduce State assistance for those who refuse job offers.