Sir, – Your article “Revenue move against the €21 billion Irish black economy” (December 12th), reflecting the fact that the black economy is currently at 13 per cent of GDP, will come as no surprise to those of us who encounter it on a daily basis, to our cost.
I would like, on behalf of the Association of Landscape Contractors of Ireland, to offer a workable solution to part of this problem in the construction sector, namely by re-introducing the Residence- Related Employment Scheme (RRES), first launched during the last recession – in the early 1980s.
The objective of this scheme then was to give an advantage to tax-compliant contractors who. once registered under it, could offer to the householder the prospect of a tax allowance at the standard rate of income tax against the quoted cost of home improvements. Given the parlous state of the property market, there is great appetite and need for such works, as people are staying put and the large pot of savings held by Irish people could be unlocked in some part by giving the householder an incentive to spend on improving their long-term home.
More importantly for the depressed construction sector, it would allow thousands of small businesses which are hanging on by a thread to remain viable, to maintain employment, and to be competitive against the black market operator. At a time when all jobs are valuable, surely the Government should be paying as much attention to job retention as to job creation? Here is a cost positive way to do it.
The Revenue would be the big winners as, via this RRES scheme, they would have a proper inflow of VAT, PAYE, PRSI and corporation tax from such activity, rather than losing it to the black economy. Even 10 per cent of the €21 billion would have a massively positive effect on the Irish labour market, and all at the stroke of a pen! Sounds too good to be true?
We have already suggested this idea to Minister for Enterprise Richard Bruton, and had it included as a Budget proposal from ISME, to which we are affiliated. There is no sign of it in the Budget proposals, but we would hope it is not too late for a Minister to bring on board as good an idea as the RRES, with huge potential benefit and little obvious cost. – Yours, etc,