The Irish Taxation Institute held a breakfast briefing on Budget 2020 at the Shelbourne Hotel in Dublin city centre today.
Fergal O'Brien, Ibec's Director of Policy and chief economist, said the most positive thing from Budget 2020's planning perspective was the scale of ambition that is now coming from Government in terms of being willing to do what will be needed to support businesses through a no deal or very hard Brexit.
But, Mr O'Brien said that in terms of individual businesses and what they will need to do, it will still be very difficult to know what they can "plug in to" if the worst comes to pass.
Mr O'Brien said that Government support for diversification is very important, while he also welcomed the non-loan support for companies. He said that for a lot of businesses - if the Brexit process gets really difficult - debt will not be the answer and Finance Minister Paschal Donohoe yesterday talked about grant solutions and support for capital equipment.
He also said that Mr Donohoe was probably acknowledging that more might need to be done. Ibec has estimated that businesses would probably need about €600m a year in the event of a very hard or no deal Brexit. The economist said that what the Minister set out yesterday was quite ambitious, adding that Ibec would work with Government to see the specifics of some of those schemes.
"What businesses can know today is that we are better prepared that 24 hours ago in terms of the ambition coming from Government - and that is a positive," Mr O'Brien said.
On Capital Gains Tax relief for entrepreneurs, Frank Mitchell - President of the Irish Tax Institute - said he was surprised the lifetime limit was not increased on this relief. He said the relief available to entrepreneurs is very useful as it allows for investment of €1m at a 10% instead of a 33% rate.
The Government had received an independent review from Indecon of the measures, and Mr Mitchell said the Irish Tax Institute and others had been arguing for an increase in the limit of €1m. Indecon came back and said that they supported the measure and thought it was very useful for the economy and in supporting SMEs and suggested that it actually be increased to €12m so that Irish SMEs could compete for capital with the UK where their equivalent measure is £10m.
Mr Mitchell welcomed the fact that the Finance Minister Paschal Donohoe took a collaborative and open approach to looking at this issue but he said it was unfortunate that at this point in time Mr Donohoe was not convinced in the merits of the increase. He said the Tax Institute sees measures such as these as investments and not costs.
The Research and Development tax credit was increased from 25% to 30% in yesterday's Budget and Mr Mitchell said this was a good stimulus for business. He said the increase is aimed at micro and small companies and will allow them a credit for pre-trading costs as well.