TAX IS A BURDEN
Forty-four per cent of Irish businesses believe that the current tax structure does not encourage start-ups, according to an Irish Taxation Institute (ITI) survey carried out by Red C Research in the Sunday Business Post. This year’s annual poll by the ITI focuses on the impact of tax on business, a vital issue at a time when many SMEs in particular are facing tough trading conditions. Some 59 per cent of the firms surveyed judged tax to be a “significant burden” or somewhat of a burden”.
This was higher than the last time this question was asked by Red C in 2007, though there has been a six-point fall in those who considered it a “significant burden”. VAT provides the greatest administrative headache for businesses of all sizes – but particularly for small and medium-sized companies, followed by PAYE and PRSI, the income levy and corporation tax.
Asked if tax systems and other state obligations are a disincentive to new start-ups, some 44 per cent of those surveyed – and 46 per cent of the small companies in the sample – said it was. Almost two-thirds of companies felt that a more centralised approach by state bodies would relieve some of the obstacles to start ups. This would simplify payment and filing obligations and make the taxation process and other bureaucratic procedures easier to understand and comply with.
In terms of tax, the complex and daunting nature of obligations, business people believe, is the most common concern for new businesses, closely followed by fear of missed tax payment deadlines and the penalties which can be imposed if mistakes are made. The survey found that only 15 per cent of SMEs in Ireland had availed of the Business Expansion Scheme.