Over the last 18 months, the innovative measures and schemes put in place by the Government to support businesses affected by the public health restrictions have allowed many businesses to survive, in particular SMEs and the entertainment, hospitality, and retail sectors. In our Pre-Budget 2022 Submission, delivered to the Minister for Finance, Paschal Donohoe T.D and Minister for Public Expenditure and Reform, Michael McGrath T.D. on 22 July, we concentrated on the immediate and short-term measures that could continue to support businesses as we emerge from the shadow of the pandemic.
The submission sets out a number of tax policy proposals relating to
- supporting jobs – measures like a temporary extension of 0.5% Employer PRSI following the withdrawal of the Employment Wage Subsidy Scheme (EWSS),
- keeping cashflow in businesses – such as including corporation tax balances due in 2020 in the Debt Warehousing Scheme, extending the temporary accelerated loss relief measures for a further year and retaining the reduced statutory interest rate of 3% on overdue taxes,
- supporting innovation and the new way of working post-pandemic – with accelerated capital allowances to facilitate remote working and encourage investment, and
- building resilience, productivity, and innovation in our indigenous SMES.
The submission also builds on matters raised by the Institute in our Pre-Finance Bill 2021 submission. For example, changes to the rules and operation of existing tax incentives which could all be of significant benefit to SMEs and Start-Ups in the medium to longer term, such as the
- Employment Investment Incentive Scheme (EIIS);
- Start-Up Relief for Entrepreneurs (SURE);
- Key Employee Engagement Programme (KEEP); and
- R&D Tax Credit.
The Institute hopes that the Commission on Taxation and Welfare will give its attention to the Capital Gains Tax (CGT) rate over the coming year too.
We will continue to engage with a range of stakeholders and policymakers on these issues over the coming months.
You can read our Pre-Budget 2022 submission here.