Business groups have given a broadly positive reaction to the measures announced in Budget 2016.
Amongst the Government’s plans are a reduction in the Universal Social Charge for incomes under €70,044, the introduction of a €550 tax credit for self employed workers and small business owners, and the introduction of a Knowledge Development Box that offers a reduced tax rate for research and development.
The Small Firms Association has welcomed the move to tax equalisation for self-employed workers and entrepreneurs.
It also said that changes to the Capital Gains Tax regime, which will give relief to those selling their companies up to a value of €1m, would be a boost to small business owners.
“This Budget is a strong endorsement by Government of the importance of entrepreneurship and small business in Ireland,” said SFA chairman AJ Noonan, who also welcomed cuts to the level of tax charged on many workers.
“The extra €600m back in people's pockets will be a serious boost to the domestic economy, such as retail and hospitality, which is still struggling in many parts of the country.”
Chambers Ireland said this was a budget that finally “recognises that entrepreneurs and small businesses are the drivers of economic growth”.
Chief executive Ian Talbot said this was a vitally important statement for now and the future, and he particularly welcomed the moves to bring equality to self-employed pay, and to address the cost of childcare.
The Irish Farmers' Association was also positive about the €550 tax credit for self-employed people, and welcomed progress on other farm taxation measures.
IFA president Eddie Downey particularly welcomed measures to facilitate farm succession, as well as changes to farm forestry.
Business group Ibec said the measures represented the right budget at the right time for the country.
It said Budget 2016 was the best one for entrepreneurs in a decade, while changes to USC would help encourage people back to work.
“The crisis is behind us and we are planning ahead. The Government has taken on board the concerns of business, reduced the marginal tax rate and encouraged private investment,” said Ibec CEO Danny McCoy.
“A reduced [USC] rate will make it more attractive to take a job, accept a promotion and do overtime. It will help attract Irish emigrants back and make it easier for companies to attract and retain mobile talent.”
However Mr McCoy said the marginal rate of income tax was still very high.
Elsewhere, tourism group Fáilte Ireland welcomed the continuation of the reduced VAT rate for the hospitality sector.
The 9% rate was introduced in 2011 and has been extended ever since then. It is seen to have been an important part of the tourism sector’s recovery and has helped make Ireland more attractive to overseas visitors.
“The tourism sector is once more experiencing steady growth and generating significant levels of revenue and jobs – particularly in rural Ireland where tourism is the main local industry in many parts”, said Fáilte Ireland CEO Shaun Quinn.
“The lower VAT rate allows Irish tourism to compete aggressively with competing overseas destinations and to provide our visitors with the good value to match the quality of our welcome.”
The Licensed Vintners Association, which represents publicans in Dublin, also welcomed the retention of the 9% VAT rate.
However it also expressed disappointment at the fact that excise duty on alcohol was not reduced, though it accepted that the lack of a move was not unexpected.
“We made a strong case for a reduction in excise... but we also knew that securing a reduction in the current climate was challenging,” said LVA chief executive Donall O’Keeffe. “However as the economy improves we look forward to seeing significant reductions in excise rates next year.”
ISME gave a general welcome to Budget 2016, and said the move to make self-employed pay equal to PAYE workers was long overdue.
It also welcomed reductions in the USC, though it said the rise in the minimum wage would ultimately be a cost to businesses - as would the introduction of two weeks paternity leave from September.
The Construction Industry Federation said it was broadly supportive of Budget 2016, adding that it set the country on a positive path for economic growth and recovery.
However, the CIF said that further actions are needed in order to kick start growth in the construction sector, which currently employs more than 125,000 people.
"It is essential now that we see follow through on the plans set out in the public capital programme in order to ensure critical infrastructural projects take place across the country," the group said.
Angela Keegan, Managing Director of MyHome.ie, said Government action to address the lack of supply of new homes in certain areas, particularly in Dublin, was lacking in today's 2016.
“The lack of starter homes has had a knock on effect on the rental sector and exacerbated the social housing situation. Until we meet this demand rents will continue to rise - at present they are just 0.5% below their previous peak - and the social housing lists will continue to grow and grow," Ms Keegan stated
