A decision by the Irish Congress of Trade Unions (Ictu) to lodge a complaint with the EU about recent extension of the Business Expansion Scheme (BES) has been greeted with "utter disbelief" by the Minister for Enterprise, Trade and Employment, Micheál Martin.
A statement from the Minister said his reaction to the news of Ictu's move was one of "utter disbelief". The Minister's department is responsible for the promotion of small businesses.
Ictu has argued that generous terms in the scheme could allow wealthy individuals to shelter their income from taxation.
It has also argued that some of the BES projects have little commercial impact either in terms of employment or in relation to the wider economy. This position has come under attack from the small firms group ISME.
The reason why Ictu is complaining to the EU is because the European Commission must approve schemes like the BES and make sure they do not represent unfair State aid.
The scheme was expanded in Budget 2007 and the Government claims the extension is aimed at helping small businesses to grow and create jobs.
"The BES scheme has helped small businesses to create thousands of jobs, and this expansion will support an enterprise culture," said the Minister's statement.
"The expansion is in line with the proposal of the small business forum which has been working and considering the issues facing firms over the past 12 months. The suggestion that the scheme would be used as a tax avoidance measure flies in the face of the reality that anyone who invests in business is taking a risk."
"I am inviting the Congress of Trade Unions to meet with me to discuss its concerns, and ensure that we continue to develop an environment which supports small business and the jobs it provides across the country," concluded Mr Martin.
This week, the Ictu's economic adviser Paul Sweeney said: "The cost of these schemes to the taxpayer is likely to be far higher than the stated €178 million, because most tax expenditures are underestimated. The tax forgone by the Exchequer will be made up by working people."
The Ictu also complained that the BES projects were a stimulus to business at a time when the economy was booming.
