Ibec calls for tax incentives to lure emigrants back home

Tax incentives should be provided to Irish emigrants abroad to encourage them to return to Ireland to live and work, business group Ibec has said.

The call comes as the Small Firms Association (SFA) forecast that SMEs here will create as many as 30,000 jobs next year.

Ibec said more needed to be done to address the damaging loss of talent through emigration in recent years. It said a new approach was required to attract back those who left Ireland during the downturn and to encourage further economic growth.

The organisation has urged the Government to introduce a temporary tax credit for recent emigrants to encourage them to return home. It also wants to see the setting up of a new competitive feasibility fund within Enterprise Ireland to assist those coming back to Ireland to establish high-growth potential start-ups.

“There is now a compelling case for many of those who left over recent years to return. The jobs recovery remains strong, new roles are being created in many sectors, and Irish business will create over 1,000 new jobs every week in 2016. However, much more must be done to make Ireland a more attractive place to live and work,” said Ibec’s director of policy Fergal O’Brien.

“Meaningful tax reform can play a crucial role in attracting talent back to Ireland over the coming years ,” he added.

Reform

Mr O’Brien said in addition to tax breaks, increased investment in infrastructure, housing and public services would also help encourage Irish emigrants to think about coming back to Ireland.

The Government has previously looked at reform of the income tax system to encourage emigrants to return home without committing to it.

According to a new survey by Amarach Research, which was commissioned by Ibec, there is limited support from the public for the introduction of tax incentives for emigrants.

The study found that 32 per cent of the 1,000 individuals reflecting the broader population it surveyed in late September were broadly in favour of tax breaks for those returning home as against 40 per cent who dismissed the idea. The remaining 28 per cent surveyed were neither in favour nor against the proposal.

There was stronger support for the idea of reforming the tax system to give incentives to Irish emigrants coming back to set up businesses with 51 per cent in favour and 26 per cent opposed to the plan.

Separately, the SFA said that small businesses in Ireland are planning to take on more staff in 2016 on the back of improved economic conditions.

“There is a strong feeling amongst the 182,000 small firms in Ireland that the business environment will continue to improve in 2016 and they plan to create 30,000 more jobs, further enrich their communities and drive economic progress,” said SFA chairman AJ Noonan.

He warned, however, the biggest risk facing the economy is loss of competitiveness.