CORPORATION tax for service companies should be reduced to 10 per cent on the first £50,000 profits, the Irish Small and Medium Enterprises Association (ISME) has said.
The budgetary effect of such a move is likely to be positive as more service companies would declare a profit, rather than taking the revenue out as income, ISME claimed. It called on the government to commit itself to such a reduction during the lifetime of the next pay deal.
ISME chairman Mr Don Curry said the 10 per cent dividend relief, which applied to owner managers, but which was abolished approximately three years ago, should be reintroduced. It allowed owners to take up to £14,000 a year out of their companies, and pay tax at 50 per cent of the marginal rate.
He said the relief should be restructured for proprietary directors. It was the sole fiscal recognition of entrepreneurial endeavour, he said.
"Small firms are risk takers and are substantial providers of employment and they must be rewarded," he said.
ISME chief executive Mr Frank Mulcahy accused the Government of not understanding the nature of risk taking, and called for the immediate restoration of dividend relief.
