Tax-relief savings scheme proposed for small business funding
CPA Ireland president calls for lessons to be learned from SSIAs and crowd-funding
Cormac Fitzgerald, CPA Ireland president: “We need to take a leaf out of the crowd-funding book as well as learn from the SSIA experience.” Photograph: Shane O’Neill / Fennell Photography.
Billions of euro could be diverted into funding small businesses if banks, Government agencies and company owners adopted the Special Savings Incentive Account (SSIA) scheme model, it has been claimed.
Cormac Fitzgerald, the newly-elected president of the Institute of Certified Public Accountants in Ireland (CPA Ireland), has called for further reforms to the Employment and Investment Incentive Scheme (EIIS) that he believes will support job creation among small and medium-sized enterprises.
“The Government should look to the sources of finance which already exist and look for a means of directing them towards the SME sector,” Mr Fitzgerald said in his inaugural address to CPA members.
Mr Fitzgerald, who employs more than 110 people in Co Cork across his various businesses, said “a more imaginative approach” to SME funding was needed.
“There is more than €90 billion in personal savings lying in deposit accounts earning negligible returns for savers. If just a small proportion of this total was invested into Irish SMEs, the results could be transformative,” he said.
Under the SSIA scheme, the Government gave accountholders €1 for every €4 they saved, up to a maximum of €254 a month, over a five-year term. Introduced by former finance minister Charlie McCreevy, about 1.1 million SSIAs were taken out between May 2001 and April 2002.
“We need to take a leaf out of the crowd-funding book as well as learn from the SSIA experience,” Mr Fitzgerald said.
His proposal centres on tax relief on savings, rather than Government bonuses, however.
“If savers were allowed to put some of their money into an account which would be lent to or invested in SMEs under the management of their bank and get full tax relief for it in the way that EIIS investors do,” he said, “this could divert billions of euro in funding into the sector at effectively no direct cost to the State.”