The Republic continues to have one of the lowest rates for start-ups in Europe, and the situation will not improve unless the Government takes concrete steps to increase investment supports, Technology Ireland has said.
In a submission to the Government ahead of next week’s budget, the Ibec-affiliated organisation which represents many of the leading Irish-owned and multinational tech-focused companies said more must be done to help those starting out on the journey of building a business.
It also voices concern about a decline in the number of students studying tech-related courses, warns of a need to provide certainty for multinationals, and calls for action to safeguard competitiveness.
The lobby group says in its submission that the tax system has “a key role in mitigating the risk borne by entrepreneurs”.
It calls on the Government to use Budget 2019 to send a signal of intent to serial entrepreneurs by radically improving the capital gains tax reliefs through the introduction of a 12.5 per cent rate with no lifetime cap on gains.
Technology Ireland also urges the Government to renew confidence in the Employment and Investment Incentive scheme by improving processing times and by upping the current €150,000 annual limit on investment to match that of the UK’s, which currently stands at €2 million.
It also said the uncertainty caused by the current system of split relief could be ended by providing full relief.
Other supports recommended by Technology Ireland include the introduction of a simplified pro-forma R&D tax credit scheme for SMEs, better guidance for companies on share buybacks or redemptions, and the establishment of an enterprise management incentive scheme that would mirror the one set up by the Swedish government last year that eliminates income tax on employee stock options in start-ups.
Technology Ireland also uses its submission to call on the Government to provide certainty to tech-focused multinationals and to improve the State’s overall competitive landscape and quality-of-life issues.
"Budget 2019 must provide supports for indigenous technology companies as well as ensuring certainty to the many multinational tech companies based here," said director Una Fitzpatrick.
“The Irish technology sector weathered the global economic downturn far better than other sectors, with many large scale job-creation projects and R&D investments announced over the past number of years. “However, the decreasing number of students in technology-related courses and a general erosion of our competitive position are of grave concern to the industry.”