Entrepreneurs including Wayflyer’s Jack Pierse and Shorla Oncology cofounder Orlaith Ryan have warned issues with the current tax and administration system need changing to make Ireland more attractive to business.
Mr Pierse, whose company recently reached a $1 billion valuation, said tax rates and options schemes could be improved to make Ireland more attractive compared to the UK, which he said currently has the advantage.
“Most of these people who work for us want to probably go on to start their own businesses. I worked for another entrepreneur for two years when I’m starting my own business,” he told the Scale Ireland Autumn Update gathering of entrepreneurs and businesses in Dublin. “Having a 52 per cent tax rate on all the money they [entrepreneurs] make, that they would probably invest back into the economy over the next few years hiring people, just doesn’t feel like it makes a whole lot of sense. It’s probably something that could be worked on.”
He said the company had been “lucky” in hiring the staff they needed. “Hiring staff hasn’t been the hardest thing in the world. But that’s probably limited a little bit to ourselves compared to everyone else,” he said.
Shorla’s Orlaith Ryan said that while the R&D tax credit was important, the process was complex. It was a similar complaint from Squid cofounder Matthew Coffey, who said the administration on agreements such as SAFE was a “distraction from pushing on the business”.
This was Scale Ireland’s first in-person event, with the pandemic and accompanying restrictions leading the group to rely on virtual briefings and webinars. The in-person event also heard from investors Will Prendergast of Frontline VC and Faye Walsh Drouillard, founder and general partner of WakeUp Capital on the current state of funding.
“This event is very timely because it comes just two weeks ahead of the budget,” said Scale Ireland chief executive Martina Fitzgerald. “It is also coming at a really critical juncture for Ireland Inc because the Government is formulating a new policy, a White Paper on enterprise policy. It is vital that the indigenous tech start-up sector is centre stage in our future economic planning.”
High interest rates and inflation are sparking a “considerable regime change” in Ireland and other European economies, Minister for Finance Paschal Donohoe told the event.
Mr Donohoe said the country was in the “very early days” of the change. “We’re going to evolve from an environment of very low inflation and very, very low interest rates to, at least for a time, higher inflation than we are used to, with interest rates that are clearly changing.”
The Minister refused to divulge any details of the forthcoming budget, but said it would address some of the current difficulties. “This will be a budget that will be about how we respond to a cost-of-living challenge and a great challenge that is now beyond where we were in the summer.”