IRISH companies are more concerned about the impact of tax and legislation on their businesses than interest rates, a new survey states. Over 75 per cent of companies believe tax and PRSI act as a constraint on their businesses.
Irish companies also cite corporation tax as a major issue of concern, according to the European Business Survey. "The issue of employment taxes has to be addressed," says Mr Paul Raleigh, a partner in Grant Thornton, chartered accountants, whose firm carried out the survey in Ireland.
He says the Government must be careful not to let the European Commission bring in further laws to hinder employers.
The survey, which examines the business outlook and issues, affecting Europe's small and medium enterprises, reports that Irish firms are optimistic about their performance this year.
Some 74 per cent expect turnover to increase and 58 per cent expect an increase in profitability. These figures represent a slight fall compared to last year, when 64 per cent forecast an increase in profitability and 78 per cent expected turnover to rise.
Companies which expect to take on more employees this year have increased to 37 per cent from 35 per cent last year. Only 5 per cent expect to reduce their workforce.
The survey of 1,000 Irish companies, of which 200 responded, shows that Irish businesses are very optimistic on investment plans for this year. Irish respondents led the field when asked if they intended to invest in plant, machinery and buildings. Other EU countries which also intend to invest heavily in these areas include Italy, Spain and Portugal.
There was also an increase in the number of Irish companies which say they have sufficient finance to fund their plans for the next three years. This has risen from 57 per cent in 1994 to 66 per cent this year.
Overdraft and leasing are the most popular sources of external finance in Ireland, the survey says.
Ireland lags behind other countries on the export front. Just 34 per cent of companies export, compared to the EU average of 54 per cent.
