IMPACT OF A ‘HARD’ BREXIT ON SMES COULD DERAIL IRELAND’S ECONOMIC RECOVERY
3rd September 2017: In a new SME policy paper published today, the British Irish Chamber of Commerce has called for the introduction of policy measures that safeguard the competitiveness of Irish SMEs in light of Brexit.
The Chamber’s SME Committee highlights the urgent need to support the position of Irish SMEs in the UK market, to improve the competitive environment that SMEs operate in, and to invest in the future needs of the economy.
Small and medium sized enterprises are particularly exposed to the UK withdrawal from the EU given their strong export dependence on the UK, with over 40% of Irish SMEs exports being destined for that market. The high concentration of SMEs within the agri-food sector is also of concern due to the potential high tariffs of up to 60% that could be imposed as a result of Brexit.
The policy paper recommends that the Irish Government:
- Reinstate the reduced lower rate of employer PRSI to 4.25%;
- Expand the Entrepreneur Relief on Capital Gains Tax (CGT) to a lifetime limit of €15m;
- Introduce a ‘Customs Voucher Scheme’ for all small and medium sized enterprises dealing with customs for the first time;
- Increase Capital Expenditure to 4% of GDP, with a specific call to bring forward the scheduled start date for Metro North and Brexit proof national ports and airports;
- Develop a marketing grant for Irish SMEs that are exposed to the UK akin to Bord Bia’s Marketing Intensification Programme.
Speaking ahead of the publication of the policy paper John McGrane, the Director-General of the British Irish Chamber of Commerce, said:
“SMEs are the lifeblood of the Irish economy, accounting for over 90% of enterprises in the country and representing nearly 70% of private sector employment. Any significant reduction in the trading environment of the Irish SME sector has the potential to derail Ireland’s economic recovery. The constructive measures put forward by the Chamber’s SME Committee will help in alleviating some of the most significant Brexit-related risks to Irish business.”
Aidan Scollard, Chair of the British Irish Chamber of Commerce SME Committee added:
“The UK’s decision to leave the EU will have a significant effect on SMEs in Ireland and there is a pressing need to ensure that strong trading links with the UK are not disrupted. The livelihoods of many citizens in both countries depend on it. In light of the upcoming budget, it is vital that the government recognise the importance of the sector and proactively improve the competitive environment which Irish SMEs operate in. The recommendations put forward today will ensure SMEs remain an engine for economic growth.”
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