ITI seeks supports for SMEs

The Irish Taxation Institute (ITI) has urged the Government to introduce in the next Budget measures to support indigenous Irish firms and boost job creation.

The ITI is seeking tax relief for loans to the small and medium enterprises sector, tax incentives to help SMEs hire key staff, and lower capital gains tax to drive equity investment in the sector.

The ITI is proposing that tax on capital gains could be cut in half to 12.5 per cent for disposals of investments made between September 1st 2010 and December 31st 2011 in SMEs. It also suggested that returns on loan investments made in the SME sector should be subject to tax limited to DIRT rates.

Some restrictions could be put in place on the suggested measures to ensure they focus on smaller businesses.

Ireland currently has about 84,000 SMEs, employing about 620,000 people.

"Government needs to act decisively to leverage the potential of the SME sector through a range of focused tax measures and specifically the initiatives being put forward by ITI today," said president of the Irish Taxation Institute Olivia Lynch.

"There is widespread acceptance that our future growth will largely come from the indigenous sector. However, we need to be proactive in bringing forward sensible incentives which will provide the stimulus necessary to allow our SMEs to deliver their full potential in terms of both job creation and economic growth."