ITI President, Joan O’Connor said that the purpose of its proposed reforms is to achieve a more competitive tax system which is also simpler, fairer to administer and thus more effective.

Outlining ITI’s proposals to enhance economic growth, Ms O’Connor said that Ireland's current system for promoting enterprise requires a re-think.

“Neighbouring countries have caught up and in some cases surpassed the tax benefits Ireland offers businesses. Our economy is constantly evolving and our tax incentives must do likewise. We are not nearly as effective as we could be in attracting R&D investment from abroad or in encouraging indigenous R&D activity," Ms O’Connor observed.

"If we wish to achieve our stated objective of winning more global knowledge-based businesses, then a re-think on tax incentives is a must. Enhancements in this area should focus on a greater awareness of the R&D credit and a widening of the definition of R&D – it does not always happen in a laboratory!" she added.

Ms O’Connor argued that, by virtue of the level of credit, the lack of refunds for start-ups and the administrative complexity, the credit is just not attractive enough to compete with other jurisdictions. Moreover, coupled with shortcomings in the tax relief available for investment in know-how, she said that the grounds for reform "become very clear.”

“The current process for formulating tax legislation is deficient. The timeframe is terribly short and leaves very little opportunity for real scrutiny by any of the parties involved be they Oireachtas (parliament) members, business or practitioner representatives or taxpayers. The effect is that good policy intention can end up as poor law. From a taxpayer’s perspective, the lateness of the Budget itself means tax credit certificates are issuing 2-3 months after the beginning of the following tax year," she noted.

In recommending the introduction of an early pre-Budget report, Ms O’Connor explained that the benefits would be two-fold:

“Firstly it would set out the policy framework for the coming year and, secondly, would allow for important practicalities like changes to tax rates, allowances and thresholds for the following tax year to be initiated from an earlier date," she stated.

"An early pre-Budget Report would facilitate earlier, more informed and effective consultation with interested parties on the policy changes flagged within it. This would enhance the parliamentary process for considering policy changes and encourage greater scrutiny. This process could be substantially aided by making independent tax technical expertise available to legislators," Ms O’Connor concluded.