As Budget 2025 approaches, ISME (Irish Small and Medium Enterprises Association) has called on the Government to recognise the global economic landscape’s potential impact on Ireland’s financial health, and ensure a robust focus on indigenous industrial policy. ISME has also called for a shift away from the State’s over-reliance on corporation tax contributions.
Recent data from the U.S. Bureau of Labor Statistics has highlighted a significant softening in the U.S. labour market, with 818,000 fewer jobs added than previously estimated between March 2023 and March 2024, suggesting that the era of continuous strong US growth may be ending.
Coupled with the upcoming U.S. presidential election, where candidates are proposing significant changes to U.S. corporation tax, there is a looming uncertainty over future Irish corporation tax revenues.
Neil McDonnell, CEO, ISME, said; “The implications of these potential changes cannot be understated. As recently cautioned by the Taoiseach’s economic adviser, Stephen Kinsella, the exit of even one large U.S. multinational could have a profound impact on the Exchequer’s corporation tax yield, not to mention the significant payroll contributions these companies make. This global uncertainty underlines the necessity of a stronger emphasis on indigenous enterprise policy in Ireland. ISME’s pre-budget submission for 2025 places significant emphasis on this area, advocating for a shift away from the over-reliance on multinational tax contributions.”
Ireland’s current tax policy and regulatory framework disproportionately favour the 886 companies that employ over 250 people, despite SMEs accounting for 389,000 of the 390,000 active enterprises in the country. This approach leaves Ireland vulnerable to external shocks.
Neil McDonnell went on to say: “The €250 million seed and venture capital scheme announced by the Department of Enterprise and Enterprise Ireland this month for high-growth firms is welcome news, but we need to go far further to support indigenous business. Considering that the State supported Intel to the tune of €32.5 million in 2023, we need a real focus on how we can support our local businesses in achieving scale and resilience. The elimination of the illogical and ill-considered proposal to apply a CGT liability to the transfer of family businesses worth more than €10m would be a good place to start in Budget 2025.”
ISME Policy Recommendations for Budget 2025:
- ISME calls for the elimination of the illogical and ill-considered proposal to apply a Capital Gains Tax (CGT) liability to the transfer of family businesses worth more than €10 million. Such measures stifle the growth and continuity of indigenous businesses, which are the backbone of the Irish economy.
- Moreover, ISME urges the Government to ensure that indigenous enterprise policy drives commercial tax policy, not the other way around. By aligning these policies, Ireland can create a more balanced and resilient economy, less vulnerable to the decisions of multinational corporations and global economic shifts.
- As we prepare for Budget 2025, ISME remains committed to advocating for policies that support the sustainable growth of Ireland’s indigenous businesses, ensuring they remain at the heart of the nation’s economic strategy.
To view ISME’s pre-Budget submission in full, please visit: https://isme.ie/wp-content/uploads/2024/06/ISME-Pre-Budget-Submission-2025.pdf
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Issued on behalf of ISME, by Heneghan
For information
Neil McDonnell / ISME – (087) 299 5658 (available for comment)
Nigel Heneghan – (086) 258 7206 – nigel@heneghan.ie
Rory Sweeney – (086) 897 6442 – rory@heneghan.ie
