166. Deputy Tony McCormack asked the Tánaiste and Minister for Finance his response to claims that Ireland's SMEs are being held back by a tax system that stymies growth and ambition; and if he will make a statement on the matter. [39653/26]

SMEs are the backbone of the Irish economy, accounting for the majority of employment in the State. Their vital importance to our economy is reflected in the Programme for Government commitments for this sector.

The current taxation environment for SMEs combines a low corporate tax rate with a range of incentives to help companies access investment, scale-up and expand. The incentives complement a suite of other enterprise supports such as grant and credit schemes.

Ireland’s corporate tax strategy is designed to promote enterprise. It is important to recognise the positive impact of a low tax rate of 12.5% for businesses including SMEs.

My Department has been proactive in supporting SMEs by introducing and expanding a number of taxation measures which help small businesses. Measures include the Section 486C relief for certain start-up companies; the Employment Investment Incentive (EII); the Start-Up Relief for Entrepreneurs (SURE); the Start-Up Capital Investment (SCI); the Key Employee Engagement Programme (KEEP); Angel Investor Relief and the R&D tax credit. These tax incentives have undergone significant change in recent years following feedback from stakeholders in particular the SME community.

To support and encourage start-up companies in Ireland and recognising that small businesses are significant drivers of employment and economic activity across the country, section 486C provides relief from corporation tax on trading income (and certain capital gains) of start-up companies in the first five years of trading. The value of the relief is linked to the amount of Employer and Class S PRSI (pay-related social insurance) paid by the company, thus supporting the creation of jobs.

EII provides an incentive for investment in SMEs by giving Income Tax relief to individuals who provide equity-based finance to trading companies. This investment assists companies to scale-up, expand and create or retain jobs.

SURE is a tax relief for entrepreneurs who leave an employment to set up their own company. It provides a refund of Income Tax paid in previous years where the individual sets up a new company and invests in that company through the purchase of shares.

SCI is a tax relief for early-stage micro companies to attract equity-based risk finance from family members.