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Ireland's Small Firms Chief Calls For Tax Cuts

by Jason Gorringe,, London

28 May 2014

Ireland's taxes on capital and work are "too high and completely out of sync with competitor economies," A J Noonan, chairman of the country's Small Firms Association, has said.

Noonan made the comments ahead of the SFA's national conference this week. Noonan criticized the low threshold for the higher rate of personal tax, which takes effect at EUR32,500 (USD44,310).

He told reporters that there is no proper incentive to work and urged the Government to reward risk. He also recommended that entrepreneurs be charged a lower rate of capital gains tax, at 20 percent rather than the current 33 percent.

The Irish Government has come under increasing pressure to reform the tax system. At 52 percent, Ireland has one of the highest marginal tax rates among Organisation for Economic Cooperation and Development (OECD) countries. The OECD average is just 36 percent.

Ministers have said that they will prioritize income tax relief for working families. Prime Minister Enda Kenny recently hinted that changes could be introduced as part of the next two Budgets, and his Finance Minister, Michael Noonan, has stressed that the Government intends to reduce personal taxes when it has "the wherewithal."

The Coalition Government has however been dealt a blow by the resignation of the Deputy Prime Minister Eamon Gilmore on the back of his party's poor performance in local and European elections. Gilmore said that he was "immensely proud of the courage shown by those members of the Labour party who, over the past three years, put their country first."

Responding to Gilmore's announcement, Kenny thanked him and his party for their part in making "the collective decisions that have pulled Ireland back from the brink of the economic collapse and put the country on the path towards recovery."

Gilmore will remain as Deputy Prime Minister until a new Labour leader is appointed in July.

TAGS: capital gains tax (CGT) | Finance | Budgets | tax | small business | business | Ireland | entrepreneurs | tax thresholds | small and medium-sized enterprises (SME) | tax rates | tax reform | trade association | trade | individual income tax | Europe

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