PwC today publishes its pre-Budget submission 2023 to support Irish private enterprise. Developed in conjunction with the Family Business Network, it focuses on key tax initiatives to support home-grown Irish business, the backbone of our economy. For example, family and privately owned Irish businesses employ more than 1 million people in over 170,000 businesses right across the country.
Against a background of intense uncertainty and disruption, the proposals are aimed at supporting the Irish indigenous sector in terms of growth, cash flow, skills and jobs while also improving the competitiveness and sustainability of the sector.
The tax changes in this year's pre-Budget submission are also influenced by the findings from PwC's recent EMEA Private Business Heatmap ("the Heatmap"), scoring Ireland 14th out of the 34 European countries ranked. Scope for improvement was identified in Ireland's strategy to support growing businesses which is addressed in this submission.
Overall, while Ireland scored fourth place on the Heatmap for corporate tax, the country was ranked 19th for its income tax rate. Ireland's tax regime needs to provide greater support towards the growth of indigenous businesses, not to mention their entrepreneurial founders. Other areas for improvement identified by the Heatmap were in the areas of Environment, Social and Governance (ESG), education and skills, and technology and infrastructure.
Speaking at the launch, Nicola Quinn, Tax Partner, PwC Entrepreneurial and Private Business Practice, said: "Our pre-Budget submission 2023 for Private Enterprise sets out tax changes to support Irish private businesses in dealing with current challenges (such as staff shortages and increased costs), as well as developing sustainable businesses that will flourish into the future".
"In particular, the tax changes proposed should also help Ireland improve its overall "score" on PwC's 2022 EMEA Heatmap and have a dual focus. Firstly, measures that are more strategic and long term to incentivise investment and to support entrepreneurs – making Ireland an entrepreneur's first and only choice to set up a business. Secondly, to close the large gap for Ireland's personal taxation rates vis a vis international standards. Many of the suggested measures (particularly in the areas of the taxation of gains and employee involvement in the ownership of a business) speak to addressing that gap".
The initiatives proposed are within four key categories: employment supports, growth and investment, building a sustainable Ireland and business succession, transition and other priorities.
Overall, key measures proposed are:
Colm O'Callaghan Tax Partner, PwC Entrepreneurial and Private Business Practice, concluded: "While there are many priorities, it is really important that the Government specifically focuses on helping the private business sector in the upcoming Budget. Irish private businesses are critically important to our economy and these firms need to have the capacity not only to support their employees with inflationary pressures but also to have sustainable and competitive businesses into the future".
"A clear focus for support is also to ensure that Ireland continues to be a great location for private business. Being competitive is critical and measures in the Budget that enhance Ireland's attractiveness as a location for private investment, from a corporate and an individual perspective, would be very welcome".
Attracting and retaining talent, reskilling and preparing their workforce for the digital future continue to be key areas of focus for many private business owners.
While the fundamentals of our economy remain strong such as employment, FDI inflows, exports and fiscal revenues, there is currently a geopolitical crisis with supply chain disruptions and escalating inflation. Measures aimed at stimulating growth and investment in private businesses need to be monitored and targeted to protect Irish businesses in so far as possible against the significant inflationary and global supply challenges that are likely to endure into 2023.
Ireland has committed to a legally binding target of net zero greenhouse gas emissions no later than 2050 and a reduction of 51% by 2030. In this regard, changes and incentives are needed to ensure that Ireland meets its targets.
Succession planning and planning for future exit strategies continue to be high on the agenda.
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