Dublin Chamber has made a preliminary submission to Government ahead of Budget 2022. Based on feedback from the across the business community, Dublin Chamber has identified the following four strategic priorities.
First, the Government should maintain and adapt business supports to manage the transition out of the pandemic while maximising business survival rates and minimising long-term economic scarring. Second, it must develop a national strategy for the recovery of urban Ireland, with a focus on delivering housing at appropriate densities and sustainable infrastructure to support this. Third, it should adopt ambitious measure to boost investment in Irish enterprise and increase national competitiveness as a location for entrepreneurs. Finally, the Government should accelerate the transition to a sustainable and innovative economic model that will form the basis of prosperity in a rapidly changing world.
Dublin Chamber’s preliminary recommendations in support of each of these goals at this stage in the budgetary cycle are:
Maintain Covid-19 business supports until a summary rescue process is in place for small firms in difficulty.
Dublin Chamber is urging Government to enact and commence the legislation for the ‘examinership lite’ Small Companies Administrative Rescue Process (SCARP) before the Covid-19 business support architecture is withdrawn. The commencement of the legislation should be accompanied with a targeted communications campaign to explain the rescue process to qualifying companies, bearing in mind that many time-pressed business owners who have been impacted by the pandemic will be unaware of the new system and may have limited knowledge of the examinership process in general.
Double public capital investment in housing, targeted in urban areas to deliver appropriate accommodation and ease pressure on the private market.
Dublin Chamber has called on the Government to double public capital investment in housing, targeted in urban areas to deliver appropriate accommodation and ease pressure on the private market. The availability and affordability of accommodation remains the most immediate threat to cost competitiveness in the Greater Dublin Area. Businesses need decisive action to address the crisis through construction of purpose-built affordable homes in a large scale in Dublin and other cities.
Introduce a 20% Capital Gains Tax rate on disposals of investments in SMEs to boost investment in Irish enterprise.
Dublin Chamber has long made the case for an improved environment for equity investment in Irish SMEs. Ireland’s present CGT regime effectively incentivises passive investment in ‘blue chip’ foreign firms over investment in higher-risk domestic enterprises by applying a flat 33% CGT rate, one of the highest in Europe, irrespective of risk profile or the contribution of the underlying investment to the Irish economy. To address this, Dublin Chamber supports a 20% rate of CGT on investments in unquoted trading companies where shares have been held in excess of 3 years.
Introduce a ‘Going Green’ Tax Credit to encourage adoption of sustainable business practices, accelerating the carbon tax timeline if needs require.
The Government should consider a tax credit for businesses that have undertaken and completed three items from an approved list, or ‘Sustainable Business Register’, to significantly reduce greenhouse gas emissions or otherwise improve sustainability. Items could for example include: facilitation of remote and flexible working; retrofit and energy efficiency measures; green supply chain guarantees; waste management practices; circular economy measures; and adoption of low emissions transport. The credit would be linked to the costs incurred in completing these items, and would be modelled on the R&D tax credit, calculated at 30% of qualifying expenditure.
You can read Dublin Chamber’s submission in full here and we would welcome further feedback over the coming months.