The Certified Public Accountants In Ireland (CPA Ireland) has harshly criticised the Government for what it sees as ‘absurd’ and ‘unfair’ tax treatment that prevents start-ups from flourishing.
Speaking during his inauguration as the newly-elected president of the organisation, Brian Purcell said that he considers the current situation in Ireland so severe that Irish entrepreneurs would be better off starting their business in the UK or the US due to what he sees as unequal tax treatment.
Much of the issues with start-ups in Ireland, he said, was that there was no business sense currently for entrepreneurs to continue on with developing their business and they are “effectively forced” to sell their business on because of punitive and discriminatory taxes.
An ‘absurd situation’
Some of the key issues he raised included the rate of capital gains tax placed on entrepreneurs in Ireland, which, compared with the UK, has a special entrepreneurs’ relief scheme that reduces to 10pc the capital gains tax rate on the first stg£10m profit made from the disposal of a business.
“In Ireland,” he said, “you have the absurd situation where the greater the value an entrepreneur adds to a business the more they will owe the government in tax when they eventually come to sell it or pass it on to the next generation.”
He continued: “[The UK model] encourages them to hold onto a business for longer and develop it to a real scale. The Irish government needs to follow suit. It is an intolerable situation where Irish entrepreneurs have to pay more than three times as much tax as their UK counterparts. That’s certainly not a sign of a great country in which to start up and grow a business”.
Self-employed taxed 4.4 times more
Among the many issues Purcell had with the current state of tax in Ireland, one of the most criticised was the Government’s policy when it comes to taxing self-employed people who, according to the CPA’s findings, pay more than 4.4 times the amount of tax as someone who isn’t self-employed.
“Despite commitments by the Minister for Finance and the Taoiseach to introduce tax parity, self-employed people in Ireland continue to be discriminated against in terms of PRSI rates, USC rates and tax credits,” Purcell said.
“The impact of this is that, at the lower end of the earnings scale, the self-employed taxpayer pays 4.4 times as much tax as an employee on the same income. This is a far cry from the ‘best small country in the world to do business’ that the Taoiseach claims he wants Ireland to be.”
Taxes in Ireland image via Shutterstock
Buy your tickets now!