The unfair tax treatment of Irish entrepreneurs means that they could be better off starting a business in the UK or the US, Brian Purcell, the new President of the Institute of Certified Public Accountants in Ireland (CPA, Ireland) has said.
Purcell called for significant amendments to the tax system to incentivize Irish entrepreneurs to take risks and Start-Up and grow businesses in the country. “ In Ireland” 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. This prompts them to sell the business sooner rather than later and well before it has an opportunity to realize its full potential in terms of international scale or employment generation, “ he said”.
Purcell pointed out that the UK offers an entrepreneurs, relief scheme which reduces to ten percent the capital gains tax (CGT) on the first GBP10m ( USD15.4m) profit made from the disposal of a business.
Purcell added that self-employed people in Ireland are discriminated against in terms of pay related Social Insurance (PRSI) rates. Universal Social Charge (USC) rates and tax credits. He wants to see the introduction of a tax credit for the self-employed incomes over Eur100’000 should be abolished, he added.
“We need to be rewarding and incentivizing the risk-taking associated with successful entrepreneurs, not punishing it with higher taxes, a level playing field for self employed entrepreneurs is required as a matter of urgency. The higher tax burden they are forced to bear is a serious anomaly and has impacts far beyond the earnings individual. Business people. It also impacts on our ability to keep talent at home and encourage our entrepreneurs. Talented people now have choices about where to start up and grow their business and we want them to do it here and not in the UK or other economies with more attractive tax system”, Purcell said.
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