Darragh Kilbride: Tax incentives would boost SMEs

13 January 2013

THERE is ample evidence that tax policy shapes behaviour. When taxes rise, consumer spending falls. When there are tax incentives to invest in business, taxpayers choose to do so.

Income tax was not increased in last year’s budget, which was welcome. The direction of tax policy, however, and the way it impairs the growth of new businesses in this country, remains fundamentally flawed.

While a reliance on small and medium enterprises (SMEs) to help bring the country out of recession is acknowledged, little or nothing is being done to use tax policy to incentivise entrepreneurs.

Comparing tax policies here over the past few budgets with those of our closest neighbour — the UK — Ireland does not emerge favourably.