SME Recovery Ireland said today's Budget marks a big step to help the recovery and sustainability of the country's decimated SME sector.
Reacting to the €17.75 billion Budget package, SME Recovery Ireland said the group is particularly encouraged to see SME focused supports which it had called for in the budget.
These supports included the Recovery Fund to stimulate increased domestic demand and employment as well as a new Covid Restrictions Support Scheme (CRSS) which will pay up to €5,000 a week to businesses forced to close temporarily because of Level 3 Covid-19 restrictions or higher from today.
It also welcomed the extension of the tax warehousing scheme to include repayments of temporary Wage Subsidy Scheme funds, as well as the reduction in VAT for the hospitality sector to 9%.
John Moran, the Chair of SME Recovery Ireland, said that Budget 2021 is a welcome step in providing greater clarity and certainty to Ireland's small business community
"It is assuring to see Government commit to such a high level of expenditure to ensure economic stability during what looks to be a difficult year ahead and make use of the low interest rates available to Ireland for borrowing," Mr Moran said.
Meanwhile, small business organisation ISME said the two assumptions of no vaccine for Covid-19 in the short term and a no-deal Brexit are the correct ones to build Budget 2021 around, with supports announced well into 2021.
Neil McDonnell, CEO of ISME said, said it broadly welcomed the budget measures which are designed to keep businesses and their employees going.
"It is essential that these measures are introduced because of the scale of damage endured by thousands of businesses in Ireland," Mr McDonnell said.
He said the support measures introduced in the wider hospitality sector along with a reduction in VAT to 9% are to be broadly welcomed, but he added that this stage, they are small consolation for many in the sector.
"The increase in the earned income credit to €1,650 is a long-overdue but welcome adjustment, which brings the self-employed tax credit in line with the PAYE sector, " he added.
Sven Spollen-Behrens, Director of the Small Firms Association, also said that Budget 2021 has given thousands of small business owners the certainty they needed to plan for the year ahead.
The SFA director said he welcomed the equalisation of the Earned Income Tax Credit with the PAYE credit, the return of the 9% VAT rate and the extension of the commercial rates waiver and tax warehousing scheme.
"Self-employed business owners will welcome the reliefs announced today, which show the Government's commitment to indigenous entrepreneurs," he added.
But Mr Spollen-Behrens said it is key how quickly the measures can be implemented and feed through the economy.
He also said it was "regrettable" that the Government has again ignored the SFA's call to reduce Capital Gains Tax, to 20% across the board, to make investing in a business in Ireland more attractive.
At 33%, Ireland has one of the highest rates of CGT amongst developed economies.
He also said that Budget 2021 will further increase business costs for small business with the decisions to raise carbon tax to €7.50 per tonne.
"The SFA is working alongside small firms to ensure that they can properly engage with Government on the transition to a low carbon economy. We have also called for Government to outline a long-term strategy on the transition and for further supports to allow the small business community to gain from the transition, as micro generators, investors, consumers and as suppliers of products and services," the SFA director said.