SFA seeking Budget tax breaks for small firms
The Minister for Finance should show "political courage' and meet the Small Firms Association's demand for a 25 per cent Corporation Tax rate on the first £100,000 of company profit, an SFA spokeswoman said yesterday.
Ms Lorraine Sweeney said the pressure from Brussels on the current corporation tax regime should not detract the Minister for Finance, Mr McCreevy from his stated policy of supporting small business. "The small business community will be watching closely to see if he can demonstrate that action speaks louder than words," she said.
Corporation tax changes in last January's Budget had cost the Exchequer £44 million for large business when the standard rate was reduced from 38 per cent to 36 per cent, but only £8 million for small business when the rate on profits of up to £50,000 was reduced from 30 per cent to 28 per cent.
"Clearly, the major beneficiaries of the changes were large business in financial services, retail and other sectors. This is a clear breach of Partnership 2000 and the Minister for Finance must rectify the situation today.
"It is now payback time for the small business sector which has been the engine of economic and employment growth," she said.
Partnership 2000 provided for a £100 million reduction in business taxes over the three years of the agreement.
The call for a 25 per cent tax rate on profits up to £100,000 was in line with a Fianna Fail pre-election strategy document, Rewarding the Risk Takers, and a letter issued by the Taoiseach, Mr Ahern before the election.
Meanwhile, the Independent MEP, Mr Pat Cox, has called on the minister to say whether the European Commission agrees with his new company tax orientation in today's Budget so that it will be in accordance with new EU guidelines.
He said there was no clear assurance that what the Government was trying to introduce in company taxation policy was any more acceptable than what it was planning to change.
"Given the contributory role which low company taxes have made to the attraction of mobile foreign direct investment to Ireland and the huge employment and economic benefits which flow from such investments, the importance of what happens in this policy area is of the first rank," he said.