13 October 2015
By Bryan T. Smyth
Cork Chamber today welcomes the release of this pro-business budget and in particular the reduction of the marginal rate of income below the threshold of 50% and efforts to bridge the gap between PAYE workers and self-employed over time. While these initiatives are to be highly commended, for momentum of the economic recovery to be sustained in the long term this effort must be further built upon in future budgets.
Cork Chamber President, Barrie O’Connell stated that “Budget 2016 is to be welcomed given its focus on encouraging business growth with a particular emphasis on supporting entrepreneurs and SME’s. A critical component of this budget is the reduction in the USC rates across the board which will encourage and support consumer confidence throughout the economy. We are also encouraged to see the introduction of the €550 income tax credit for those with earned income that do not have access to the PAYE credit. This is an important first step towards correcting the inconsistencies between self-employed and PAYE workers and is a timely step in supporting existing entrepreneurs and encouraging new entrepreneurs to the market. The reduced rate of CGT will also encourage investment and reward entrepreneurs and job creators which is a positive measure. Legislating for the Knowledge Development Box which incentivises businesses to undertake R&D activities by adopting a reduced corporation tax rate, announced at 6.25%, was called for within Cork Chamber’s pre-budget submission and we see this as a key component in an increasingly competitive global landscape and one that will greatly support innovation in Ireland. Overall we welcome the governments positive focus on easing the cost of childcare, the three year extension to stamp duty exemption and stock relief which will greatly benefit the Agri sector, the measures that are being implemented in support of retailers and other merchants, the extension of tax relief for start-up companies, and the measures to increase availability of investment finance for business. However the increase in business costs from the increase in the minimum wage could have been mitigated by reducing Employer PRSI for SME’s”.
Assessing the overall impact of the Budget Mr. O’Connell stated, “This budget will create momentum in rewarding work, entrepreneurs and innovation, and we welcome the retention of the hugely successful 9 per cent VAT rate for the tourism and hospitality sector. We are disappointed that 90% of housing activity will be focused in the greater Dublin area as this does not recognise the housing shortages across all urban centres in the country with Cork city and suburbs suffering from an increasingly critical housing shortage”.
Cork Chamber is the leading business organisation in Cork supporting and representing the interests of approximately 1,100 businesses employing over 100,000 people in the region. Cork Chamber delivers a wide range of member services and has a mandate to develop and promote policy recommendations that create an enabling business environment and support the region’s economic development.