Taoiseach addresses key business concerns at Ibec
Yesterday afternoon (Thursday 14 February) Taoiseach Leo Varadkar joined us at Ibec.
In a detailed exchange, Mr Varadkar addressed a range of business concerns. These included: Ireland’s response to a possible ‘no deal’ Brexit, how to better attract and retain talent, carbon tax policy, third-level funding, regional investment and corporate tax policy. A video of the session is available to view here.
The Taoiseach made the following key points:
· Brexit: If the UK becomes a ‘third country’, over 90,000 businesses in Ireland will immediately be required to pay VAT on all UK imports up front. The Taoiseach said he had listened to Ibec’s proposal in relation to a VAT deferral scheme and that the Government would introduce a system of postponed payment. In light of business proposals on possible Brexit-related state aid, he said Government was involved in detailed discussion with the European authorities on this issue.
· Entrepreneur taxation: The Government has looked at the possibility of reducing the headline rate of capital gains tax. It recognises the importance of a competitive regime to support entrepreneurship and hopes to be able to deliver a meaningful rate reduction in future budgets. The Taoiseach was also supportive of more favourable tax treatment for share benefit schemes.
· Carbon tax: The Taoiseach said he preferred a charge and dividend (return money to consumers and businesses) approach to carbon taxation. This would help convince individuals and businesses that there was a reward for changing behaviour. Business, however, is in favour of a model that more directly reinvests revenue in schemes to address climate change and incentivises behaviour change.
· Income tax: Income tax will rise by €1.2 billion this year if employment levels remain at the same level. The Government is proposing to use half of this sum to raise the level at which workers begin paying the higher rate of tax, while investing the other half in public services. In the future, Ireland’s income tax system needs to be competitive, particularly vis-à-vis the UK, he said.
· Investment: Government is committed to ensuring delivery of the National Development Plan, even in more challenging economic circumstances, and the Taoiseach gave particular support to infrastructure projects which will underpin the all-island economy, such as high-speed rail, and upgrades to roads of strategic importance, such as the A5 in the North West.
· Work permits: The Taoiseach acknowledged that delays in granting work permits and visas were causing significant issues for business and more resources were needed to reduce waiting times.
During these very uncertain times, it is crucial that the views and concerns of business are heard and understood at the very top of government. Ibec is working to represent you and your interests. Get in touch if we can help in any way.
Danny McCoy, Ibec CEO