- Proposals would raise additional €800m per annum for the exchequer
- Submission document is available here.
14th June 2022 – ISME has today published its Pre-Budget Submission 2023, and a revised version of its recommended changes to the social protection system.
Ireland is experiencing exceptional economic volatility at the moment, as significant consumer inflation is being experienced for the first time in decades. While inflation is provoking increased demand for pay awards, ISME recognises there is only so much that Government can do to mitigate the effects of inflation.
We believe that any spending to mitigate inflationary effects should be prioritised on the most in need, via the social protection system.
The main measures sought by ISME in Budget 2022 are:
- A comprehensive package of tax reform, including a solidarity USC levy of 3% on all PAYE workers earning over €100,000 per annum.
- The raising of an additional €500 million annually in CGT by lowering it to 25%.
- The elimination of the punitive “PRSI Transition Zone” for lower paid workers, by charging a new 2% rate of PRSI on weekly earnings up to €440 per week and a new 6% PRSI rate on marginal earnings above €440 pw. This change would increasethe take-home pay for all full-time workers earning less than €880 per week.
- We want to see measures to encourage an increase the number of firms listing on the Stock Exchange, and we want to make it easier for employees to invest in them.
- The cost of rent and housing is now so high that employers are buying accommodation for their employees. This creates a BIK problem for both employers and employees, and is unacceptable. Private landlords must be attracted back to the rental market via the taxation system to increase the stock of available housing.
- The cost of deep retrofit means that Government must address the cost of financing it, otherwise homeowners will not insulate their houses.
“We believe our proposals on USC and CGT would raise an additional €800m per annum for the exchequer,” said Neil McDonnell, Chief Executive, ISME. “However, with economic data showing a continuing divergence between the GDP economy, including the multinationals, and the domestic economy, which is mostly SMEs, we need a comprehensive stakeholder review of indigenous industrial policy to improve the performance of our SME sector.”