Isme urges government to avoid recession by introducing tax measures
There Recession Says Isme Of Warning Mcdonnell A Ing Are Chief Signs Executive Neil
A business lobby group has called on the government to introduce a range of taxation measures ahead of this year’s Budget as it believes recession could be around the corner for Ireland.
Isme has urged the government to make the 3% USC surcharge mandatory for all PAYE workers earning over €100,000 per annum. This surcharge is currently only for those who are self-employed.
“Isme is not saying we expect an imminent recession. We are saying that there are sufficient indicators of a possible recession that Government must act prudently, and plan and budget on the basis that one could occur in the next six to 12 months,” it said.
The body also wants Capital Gains Tax (CGT) to be reduced from 33% to 25%, as it is presently the fourth highest in the OECD. This high rate prevents businesses from scaling and getting investment into Ireland, the body claimed.
“We believe our proposals on USC and CGT would raise an additional €800m per annum for the exchequer,” said Isme chief executive Neil McDonnell.
“However, with economic data showing a continuing divergence between the GDP economy, including the multinationals, and the domestic economy, which is mostly SMEs, we need a comprehensive stakeholder review of indigenous industrial policy to improve the performance of our SME sector,” he added.
Recent CSO figures showed that multinational-dominated sectors grew by 14% in Q1 while sectors focused on the domestic market increased by 8%.
The group wants to see more entrepreneur supports in the Budget to help grow smaller businesses in Ireland. It is looking for the €1m lifetime threshold for entrepreneur relief to be increased to a minimum of €10m.
It is also seeking a new 6% PRSI rate on marginal earnings above €440 per week. They also suggested lower-paid workers should be charged a new 2% rate of PRSI on weekly earnings up to €440 per week.