The Irish SME Association (ISME) has issued its Pre-Budget 2022 Submission to Government. While Ireland looks toward the final stages of the Covid-19 pandemic, it is clear that many business sectors in Ireland will not return to 2019 levels of trading until well into 2022, and that there will be legacy debt and trading issues which will threaten the commercial viability and solvency of many SMEs.
The Central Bank estimates that up to 25% of SMEs are struggling financially[i] and as a result, ISME in its submission, has outlined the direct-to-business supports required throughout 2022 to keep these businesses and related jobs afloat.
Working under the assumption that Ireland will have exited the pandemic-induced recession in 2022 but will suffer considerable residual effects, ISME has set out a number of priorities. These include:
- Extend fiscal life-support to SMEs through targeted, grant-based liquidity supports.
- Implement a series of basic tax reforms including a solidarity tax. A USC surcharge of 3% should be introduced for all PAYE workers earning over €100,000 per annum, or a third PAYE rate of 43% should be introduced for the same cohort.
- Reinstate the temporary reduction in the punitive 23% VAT rate to the previous 21% level.
- Reforms on property tax, commercial rates and Local Property Tax.
- Ireland’s further education and training regime is inconsistent with activating a bigger workforce or training the unskilled. ISME also acknowledges that our domestic SME base requires extensive training to improve its productivity. This should be incentivised via the tax system like the Teagasc ‘Green Cert.’