Ireland must ease tax burden on start-ups to spur innovation and create jobs

US trade tariffs have exposed again the frailty of our economic model and the outsized impact of a small number of large multinational companies on Ireland's economic future.
Already this year, it has been estimated that between 30 and 40 per cent of investments have been delayed.
With the increasing geopolitical and economic volatility globally, there is an urgent need to rebalance our economy and ensure that ambitious Irish owner-manager and indigenous businesses can become drivers of overall economic growth.
Now is the time for bold decisions that can reset the course of our economy.
READ MORE
That starts with recognising the critical role that family-run businesses, high-potential start-ups, and small to mid-sized firms already play. Together, they employ two-thirds of Ireland's workforce and are the beating heart of local economies across the country.
Supporting these businesses to scale up means tackling the range of persistent challenges they face – including high operating costs, challenges in deploying automation and AI, limited access to capital, and difficulty attracting skilled talent. Doing so can unlock their full potential and strengthen Ireland's ability to withstand future economic shocks.
While discussions about US tariffs dominate, the reality is that these measures may only have a direct adverse impact on a limited number of larger companies.
Meanwhile, thousands of SMEs – the true backbone of the Irish economy – continue to grapple with day-to-day pressures and rising costs.
[
Hospitality lobby overplayed its hand on VAT reduction
Opens in new window
]
The Government has poured cold water on suggestions it would take direct action to alleviate some of these immediate pressures, notwithstanding the recent record corporation tax take. A comprehensive plan is now needed to enhance the growth potential of ambitious owner-manager businesses.
The 15-point competitiveness plan brought to Cabinet recently by Minister for Enterprise
Peter Burke
is an important step forward that could provide an initial blueprint for enhancing competitiveness and productivity within the domestic economy.
Moving to action is now crucial.
A prime example is the Government's recent decision to delay the reduction in VAT for the hospitality sector until January 2026. If the reduction is the right thing to do, delaying its introduction only prolongs the challenges faced by hotels, restaurants and cafes.
In sectors such as hospitality, for example, further delays could contribute to the loss of another 500 restaurants or cafes before relief arrives. Some may have to turn to the Small Company Administrative Rescue Process (Scarp) to recover, while others will be overwhelmed and go into liquidation.
As global volatility becomes the new normal, it's now time that Ireland puts indigenous businesses at the heart of its economic future.
The time to act is now. Our future prosperity depends on the Government seizing the opportunities ahead and implementing bold, forward-thinking policies
With the new Government developing enterprise strategy for the next decade, we must prioritise reforms and policy measures that support indigenous businesses. By doing so we can foster a more resilient and sustainable economy that can withstand international instability and disruption.
Irish SMEs looking to scale up have long struggled to do so due to limited access to capital. The new enterprise strategy could unlock the barriers that are in place. One way to do so would be to use a small portion of pension fund savings to invest in indigenous firms.
Firms that are able to overcome these barriers face real structural challenges in scaling globally. A key obstacle is the taxation burden.
[
Trump tariffs: What 'dark and damaging scenarios' could economies face in Ireland and worldwide?
Opens in new window
]
Laying out a roadmap to reducing the rate of Capital Gains Tax to 20 per cent for Irish start-ups and scaling companies would ensure that indigenous firms scale up from this island and compete globally from here.
A more balanced approach to taxation – one that incentivises risk-taking, innovation, and job creation within the real economy – should be a top priority.
Many indigenous firms struggle to attract and retain skilled talent, particularly in sectors where multinationals offer significantly higher salaries and benefits.
[
VAT cuts for restaurants were a bad idea last month. Why are they a good idea now?
Opens in new window
]
The latest
Azets
Barometer found that talent recruitment is the number two most pressing business challenge today.
Government could introduce targeted measures such as enhanced tax credits for employee share options and building a stronger supply of skilled domestic talent.
Developing an enterprise strategy that reflects the real economy and supports the needs of the vast majority of businesses within it is needed now more than ever.
Ireland is at an economic crossroads. While foreign direct investment has played a vital role in our success story, we must now take decisive steps to pivot Ireland's economy and focus on unleashing the potential of indigenous businesses.
There is no better opportunity to reshape our economic model and create a more resilient and sustainable economy, powered by thriving domestic enterprise.
The time to act is now. Our future prosperity depends on the Government seizing the opportunities ahead and implementing bold, forward-thinking policies as part of the upcoming enterprise strategy.
The choices we make today will shape Ireland's economic landscape for decades to come. We must get them right.
Neil Hughes is chief executive of Azets Ireland

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Irish Independent

an hour ago

• Irish Independent

DART expansion plan gets boost after High Court hears objections withdrawn

Two separate judicial reviews were originally scheduled for hearing in the High Court this week relating to the DART+ West element of the plan. The court heard that the cases, taken by two businesses in the west of Dublin city, had been withdrawn. The move means that the project, which last July was granted a Railway Order, the equivalent of planning permission for rail developments, is now free to proceed – pending Government funding. Preliminary works are expected to begin next year with contracts for the more major construction projects to be awarded by the end of 2026. DART+ West will expand the high-frequency electric train service from Dublin city to Maynooth in Co Kildare and the M3 Parkway park and ride station in Bennetstown, Co Meath. It is one of four elements of the DART+ project which would collectively triple the length of the existing service from 50km to 150km and double hourly passenger numbers from 26,000 in each direction to 52,000. DART+ West is expected to see some of the biggest increases in passenger numbers with a doubling of train services along the Maynooth line. For that to happen will require works that include provision of a new station at Spencer Dock in the city centre and developments at Connolly Station, including a new entrance at Preston Street. One other part of the project, DART+ South West, was granted a Railway Order last November. It will extend the service from Heuston Station to Hazelhatch in Co Kildare and from Heuston to the city centre via the Phoenix Park tunnel.. ADVERTISEMENT Learn more An application for a Railway Order for DART+ Coastal North, which would extend services from Dublin to Drogheda, is awaiting a decision from An Bord Pleanála. DART+ Coastal South would see increased frequency on the existing Greystones to city centre route and an application is expected to be made for it shortly. The overall project also involves the provision of 185 new rail carriages, currently on order, with the option to order 750 in total if all aspects proceed. The first ten carriages have arrived and are due to be put into service next year. Early cost estimates for the complete project were put at around €3 billion several years ago but it is expected that figure will rise. The Government has only approved funding up to contract award stage and will have to make a decision at that point whether to back the project's further progress. The judicial review proceedings against DART+ West were taken by businesses on the Navan Road in Dublin, near Ashtown railway station. A sitting of the High Court heard the cases had been struck out after an agreement had been reached that was satisfactory to all sides. A spokesperson for Irish Rail said the terms of the agreement were confidential.

The Journal

an hour ago

• The Journal

Higher food prices and additional support payments increase family farm incomes by 87%

HIGHER FOOD PRICES, an easing in input costs and additional support payments have contributed to increasing family farm incomes in Ireland by 87%. Economists at Teagasc – the Agriculture and Food Development Authority – today published a new report on family farm income last year and it shows a 'substantial recovery' following an 'extremely difficult' 2023. It said a combination of higher food prices, some easing in input costs and additional support payments under the new CAP (Common Agricultural Policy) has driven this increase which has seen the average family farm income rise by 87% to just under €36,000. CAP payments in Ireland are focused on improving the environment and helping to prevent climate change. Teagasc found there were 'particularly strong improvements' for dairy, tillage and sheep farms but added that this should be viewed in the context of 'particularly low-income figures in 2023'. Meanwhile, Teagasc found that 42% of farms were categorised as economically viable last year, which was one of the highest rates it has on record. And while Teagasc notes that higher food prices aided farm incomes last year, this trend looks set to continue this year. Ireland recorded the sharpest rate of increase in agricultural produce prices in the EU in the first quarter of this year, the bloc's statistical agency Eurostat said last week. Irish agricultural prices were up an eye-watering 19.3% in the first quarter of 2025 when compared with the same period of 2024. The average increase across the EU was just 2.6%. Dairy farms Dairy farm incomes rose by 113% last year when compared to 2023, to an average of €108,200. While the average dairy farm income was €157,591 in 2022, this dropped sharply to €50,677 in 2023. Teagasc said the recovery seen last year was driven by 'much improved' milk prices and favourable grazing conditions from mid-year onwards, which boosted production later in the year. Input costs, such as feed and fertiliser, also eased when compared to 2023, as did overhead costs. Advertisement However, Teagasc remarked that the 'strength of the income recovery is a reminder that Irish dairy farm incomes are highly sensitive to milk price movements which dairy farmers have no control'. Cattle farms While the average dairy farm had an income of over €108,000 last year, it's a different story for cattle farms. For cattle rearing farms, which typically focus on suckler beef production, there was a 'strong rebound' last year following an 'extremely poor outcome in 2023'. The average income increased by 93% to €13,500, driven by higher cattle prices and lower production costs. Cattle Other farms, including beef finishing and store cattle enterprises, saw their average income increase by 32% last year, to €18,101. This increase was driven by firmer prices for finished animals and lower production costs. Teagasc noted that support payments also remained an important component of income on these farms and that the income increase for this category of farm is lowest relative to other farm types. Sheep Farms The average income on Sheep farms increased by 115% last year to just under €27,796. Once more, an increase in lamb prices as well as a fall in input costs contributed to this increase, in addition to support payments. Tillage Farms Following a year of 'extremely low income' in 2023 where the average farm income was €19,204, tillage farms saw incomes rise last year by 101% to €38,685. Teagasc said this was due to a 'combination of factors', such as a switch towards spring crops after particularly difficult winter planting conditions. These spring crops fared better than winter crops and overall yields were slightly better than in 2023. Favourable weather during the summer period also aided grain quality, and grain prices were up marginally while input costs reduced. Lower fertiliser prices were also of particular benefit, although Teagasc said land rental costs remained high. Readers like you are keeping these stories free for everyone... A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article. Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation. Learn More Support The Journal

RTÉ News​

an hour ago

• RTÉ News​

Behind the Story: Saipan the movie and what next for Iran?

It was an event that divided the country: Roy Keane headed home from Saipan on the eve of the 2002 FIFA World Cup. Following a public exchange of words with then-manager Mick McCarthy, the Corkonian decided enough was enough. Now a new film from the producers of Kneecap and Cocaine Bear will tell the contentious tale of what went on in one of the most-talked-about moments in recent Irish sporting history. The trailer, which dropped today, includes the tagline 'Choose your side'. But what side are Fran and Katie on? Also, major changes are on the way for Irish students hoping to head stateside for the summer. It means those applying for an F, M, or J non-immigrant visa will have to set all their social media accounts to 'public'. Exchange visitor - or J - visas are non-immigrant visas for people to participate in exchange visitor programs in the United States. This includes J1 visas for Irish students. Other J categories include things like au pair work, interning and summer work and travel. Meanwhile what is next for Iran and could the conflict with Israel see a major geopolitical shift after US involvement? Graham Finlay from the UCD School of Politics and International Relations joins Fran and Katie to discuss what it could mean for us all.