On 3 July 2022, The Department of Enterprise, Trade and Employment invited submissions from the public to inform the development of a White Paper on Enterprise. Alan Bromell, Head of Private Enterprise, introduces the KPMG Future Enterprise policy submission.

As Ireland looks towards 2030, it is evident that a variety of challenges, from digitalisation to decarbonisation as well as geopolitical and global economic changes, are facing the country. Arguably, Ireland now faces a ‘hinge moment’, a pivotal turning point that could profoundly shape our future economy and society. 

The White Paper on Enterprise will ultimately serve as a cornerstone in protecting the core elements which make Ireland’s economy attractive for enterprise to flourish, ensuring a competitive environment that promotes micro, small and medium enterprises’ establishment and growth in the locally traded and international economies, whilst remaining attractive to international Foreign Direct Investment. The White Paper will explore several high-level policy questions under the thematic areas of strategic direction for the enterprise sector, enterprise objectives and challenges, as well as levers or policy instruments at our disposal. 

At KPMG, we are pleased to have submitted our Future Enterprise Policy response to Minister Leo Varadkar and the Department of Enterprise, Trade and Employment.  

Our submission is based on the topics we are discussing with business every day – whether they are small start up’s, established large Irish companies, or global companies looking to establish in Ireland or with long established Irish activities.

In our submission we grouped our considerations in into the following main areas of focus:

  • Encouraging and supporting domestic entrepreneurship
  • Sustainability and the climate agenda
  • Increased global competition
  • Measures to counteract inflation
  • Housing and infrastructure

We have summarised the main detail of our submission below. To access the full submission, please click on the following link.

Encouraging and supporting domestic entrepreneurship

Entrepreneurs, both domestic and foreign, can and do move location based on the taxation environment. In our view, entrepreneurial investment can be significantly influenced by targeted, pro-growth tax policies. We have therefore recommended a number of changes to our tax policy to ensure the support of domestic entrepreneurship.

In our experience, the options when it comes to the funding landscape, including bank, private equity and venture capital, is relatively narrow in Ireland. Our submission includes recommendations on how to address this lack of breadth in the Irish market to ensure indigenous Irish businesses and entrepreneurs are not under-incentivised to grow their business in Ireland, and to continue to own their business and operate from here. 

Sustainability and the climate agenda

The geopolitical issues that have emerged from the Ukrainian war have brought to the fore the county’s overreliance on imported sources of energy and our need for food security. Ensuring that enterprises are powered by renewable energy sources is one of the most important and effective actions that the State can encourage in order to assist them in their decarbonisation journey.

Our submission therefore includes recommendations on policy changes which should be introduced to increase the level of uptake of renewable energy corporate power purchase agreements.  

In addition, we have identified that there will be a need to ensure that our national skills and training mix is sufficient to support businesses in implementing new and innovative renewable technologies.

Tax policy can also be a powerful tool to promote sustainable behaviour by businesses and consumers. We have therefore included a number of tax policy changes which should be considered in order to support Ireland’s climate agenda.

Increased global competition

For Ireland to maintain its competitive position in the global tax landscape, it is necessary that Ireland’s enterprise policy, supported by the tax system, continues to attract and retain multi-national business to be based here. In this regard, we have recommended a number of tax measures to be considered to make Ireland more attractive for mobile talent.

In our view, the tax regime in Ireland should also be simplified, having undergone significant change in the last few years in response to international tax reform. There are now a number of unnecessary legacy features of our tax code. We have included various measures in our submission to achieve this simplification.

Measures to counteract inflation

Ireland’s tax regime has a role to play in helping to shield individuals and businesses from the full impact of rising inflation. We have therefore recommended that a statutory mechanism be introduced to provide for an automatic increase in tax reliefs, bands and credits. By maintaining the “real” value of tax reliefs, bands and credits, businesses will be under less pressure to deliver pay increases to both attract and retain talent.

We have also included various non-tax measures, such as making the reductions to public transport fares permanent and increasing the universal childcare subsidy, which should be considered by government to relieve inflationary pressure and mitigate wage spirals.

Housing and infrastructure

The housing crisis continues to be a defining challenge for the country, from a social and enterprise perspective. We have therefore included a number of tax policy measures to be considered which are aimed at increasing the supply of houses and reducing the cost of housing for people living here.

In terms of infrastructure, continued investment on a national level is of pivotal importance to our future enterprise policy. Not only is it necessary to ensure enterprise can locate, grow and prosper here, but spend on infrastructure can also act as a counter-cyclical hedge.

Reforms in the Irish planning system should also facilitate the efficient realisation of improved infrastructure for Ireland, thereby accommodating strategic employment growth at regional, metropolitan and local level. 

Get in touch

If you have any queries on the topics raised in this submission, please contact Alan Bromell, Head of Private Enterprise. We'd be delighted to hear from you.

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