Last week the Irish Tax Institute published its pre-budget submission in which it drew attention to the fact that Ireland was not advancing up the global rankings on entrepreneurship. Many Irish business leaders have expressed concern about the unfair tax treatment of entrepreneurs. Despite the stellar work of Enterprise Ireland under the leadership of Ms Julie Sinnamon in getting people to start up businesses, we are operating in an unfair playing field. Recently, the president of the Institute of Certified Public Accountants of Ireland, Mr. Brian Purcell, stated the unfair tax treatment of Irish entrepreneurs meant they could be better off staring businesses in the United States or the United Kingdom. He argued that the potential for entrepreneurs to build and scale their businesses here is being seriously undermined by the unequal tax treatment they receive in comparison to their counterparts in the United Kingdom and elsewhere. Specifically, he called for urgent changes to the punitive high rate of capital gains tax of 33% on entrepreneurs.

In Ireland we have an absurd situation where the greater the value an entrepreneur adds to a business the more he or she will owe the Government in tax when he or she eventually comes to sell or pass it on to the next generation. In the United Kingdom there is a special entrepreneur relief scheme which reduces to 10% the capital gains tax payable on the first £10 million in profit gained from the disposal of a business. The United Kingdom experienced a brain drain and five years ago the country improved the system of taxation for entrepreneurs. The Irish Government needs to follow suit. It is intolerable that Irish entrepreneurs must pay more than three times as much tax as their UK counterparts.

Last week I referred to the report of the Oireachtas Joint Committee on Jobs, Enterprise and Innovation, in the production of which Senator Michael Mullins participated with me. Deputy Marcella Corcoran Kennedy was Chairman and I was honoured to be rapporteur in producing the report. All 12 recommendations received unanimous support from the all-party or cross-party committee.

Does the Senator have a question for the Leader?

Yes, a very important one. The Oireachtas joint committee recommended that the Government, in the forthcoming budget, remove the discrimination in the taxation system faced by self-employed entrepreneurs by introducing a tax credit for the self-employed which would be equivalent to the PAYE tax credit and by introducing social welfare supports because, despite paying PRSI, entrepreneurs had no safety net. Most importantly, the Government should give serious consideration to the introduction of an entrepreneur capital tax rate of 10% instead of having to pay capital gains tax at the rate of 33%.