This year Galway Chamber’s Pre-Budget Submission to Government is titled ‘Create Confidence, Cut Costs of Employment’ based on what our members consider to be the most crucial needs and wants of the business community.
Chambers Ireland carried out a survey across the network last month. In the ‘Cost of Employment Survey’, respondents said any initiatives that raise the cost of employment will do nothing but increase the burden on business and hamper job creation. As a result, Chambers Ireland has called on the Government not to increase the cost of employment in Budget 2013.
Ian Talbot, Chambers Ireland Chief Executive, said, “With a high unemployment rate and the Government’s continued reiteration that employment is their number one priority, it seems strange that we have to fight to keep the cost of employment from being increased by Government. However, with continued kite-flying with regard to PRSI increases and sick pay, we have to do just that.”
In the survey, almost 90 per cent of respondents felt that an increase in employers’ PRSI would have a negative impact on their business while just over 87 per cent felt the same about transferring the cost of sick pay onto employers. Rather starkly, 26.7 per cent said that an increase in employers’ PRSI would lead to job losses, while 37.9 per cent had the same concern about sick pay.
Therefore, it is the actual costs to businesses that Galway Chamber has focused on in our Pre-Budget Submission, which is made under eight headings relevant to our members:
- Public Sector Cost Savings/Reform
- Commercial Rates
- Stimuli for SMEs
- Maintaining Ireland as an Attractive Area for Investment
In terms of item six, taxation, it is critical that taxes, both personal and relative to business, are not raised in the upcoming budget. The ‘creating confidence’ tagline is vital to our future business performance. If confidence, and with that a corresponding spend, is not fostered, businesses that are already struggling will be put to the edge.
We have also submitted proposals under the following areas:
Corporate Tax Rates
Continue to defend our 12.5 per cent Corporation Tax. This is a vital draw for FDI, which generates more jobs per head of population in Ireland than in any other country.
The Government must reduce VAT from 23 per cent to 18 per cent on a phased basis over the coming years. Given the shortfall in VAT receipts to date in 2012, the Government must recognise the negative impact of any VAT increase on consumer spending and the domestic economy. The Government must remain mindful of the impact of VAT rate changes on trading in border regions, in particular. We urge an extension to the nine per cent VAT rate for the Hospitality sector, at least to the end of 2014.
Any rise in the PRSI contributions of employers would have a detrimental impact on SMEs. Re introduce a cap for low paid workers.
The highest level of tax relief on pension contribution must be available to all in order to encourage lower and middle income earners to join a pension plan.
R&D tax credit
Continue to encourage research and development activity through the R&D tax credit.
There must be no increase in personal taxation. Nobody on the minimum wage should be in the tax net. Social Welfare must not be a disincentive to work.
To read Galway Chamber’s full Pre-Budget Submission, log onto www.galwaychamber.com
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