The Irish Small and Medium Enterprises Association has warned Finance Minister Brian Lenihan not to rely on increasing taxes as the only way to guide the country out of the current recession.
In a pre-Budget submission to the Finance Minister, ISME said that an enterprise stimulus package needs to be included in next month's supplementary Budget.
'In addition to tax, the bulk of the savings needs to be made from a dramatic reduction in public expenditure and a stimulus package to be introduced to kick-start growth, the maintenance of employment and for the sustainability and development of enterprise,' comments ISME's CEO Mark Fielding.
ISME has called on Mr Lenihan to consider the introduction of a reduced rate of 5% for employers' PRSI for salaries up to the average industrial wage of €34,000. Above this rate, PRSI should be cut to 10% from the current rate of 10.75%.
It also encourages a PRSI exemption for employers who employ people who have been out of work for over six months and calls for a commitment to cut 35,000 public sector jobs over the next two years as well as wage reductions in the sector.
The association suggests the introduction of a three year tax back initiative for SMEs, which would allow them to recoup corporation tax by offsetting losses against profits made in the previous three years. It also calls for the indefinite delay of a new carbon tax.
Among its other recommendations, ISME says the National Development Plan's original estimates, costings and time targets should be reviewed and priority should be given to those projects on the basis of return on investment.
