Carbon Tax SFA Policy
■ To increase the fuel allowance to compensate
those households likely to suffer from fuel poverty; ■ To enhance the current grants towards the cost of energy efficiency improvements in the homes of those most vulnerable to fuel poverty through the Better Energy Homes scheme or the SEAI Better Energy Warmer Homes scheme; ■ To fund sustainable transport, including cycling infrastructure and public transport; ■ For broad climate actions (e.g. earmarked to the Climate Action Fund or similar); ■ To return the proceeds by way of a dividend to citizens or households through the social welfare and/or tax system; ■ To be set aside to meet any fines the State is liable to pay arising from failure to meet our climate targets; ■ To act as a buffer against increasing the cost of doing business for businesses with no realistic short to medium term alternative to continued fossil fuel use and for whom fossil fuels constitute a large amount of overall business expenditures (e.g. by enhancing the Diesel Rebate Scheme); ■ To incentivise business moving away from the use of fossil fuels to more sustainable production methods; ■ By the Exchequer for general government expenditure. The SFA response outlined that small, gradual, predictable increases will give greater investment certainty to Ireland’s small firms. The SFA recommended that revenue raised from increases in carbon tax should be ringfenced to support investment in emissions reduction, energy efficiency and low to zerocarbon technologies. We advocated for a portion of the revenue to be used to support fuel poor households and vulnerable business sectors with no practical alternatives to fossil fuels. Following the consultation, in Budget 2020 the Minister for Finance announced an increase in carbon tax from €20 to €26 per tonne on auto fuels from midnight on Budget Day, other fuels are delayed until May 2020 and he also stated that the current Government is committed to increasing the price of carbon to €80 for each tonne by 2030. As we transition towards a lowcarbon economy, we have begun consulting with members and plan to further our engagement with Government departments, State Agencies and Local Authorities. In addition, we recommend all small firms to think about how they can become more sustainable in the coming months and years.
BUDGET 2020 The Small Firms Association has criticised Budget 2020 for not being ambitious enough at reversing the impacts of uncertainty amongst entrepreneurs in the context of Brexit, but welcomed the announcement of combined supports in the event of a ‘no-deal’ Brexit to address the challenges that will be faced by some vulnerable sectors in our economy. Responding to the details announced in the Budget, SFA Director, Sven Spollen-Behrens, said: “Even in a Budget with very limited room for manoeuvre, the Government has missed an opportunity to address the many issues facing entrepreneurs, which would assist them to plan, invest and grow their businesses. “Whilst we welcome the announcement of changes to KEEP, EIIS and the increase in the R&D tax credit to 30% for micro and small firms, it is regrettable that the Government has again ignored the SFA’s call to reduce Capital Gains Tax (CGT) to 20% across the board, to make investing in a business in Ireland more attractive. Our closest neighbour, the UK, is actively enticing entrepreneurs with a more beneficial tax treatment than Ireland. Making our tax system competitive with the UK in areas such as CGT would stimulate economic activity and add to our competitiveness. “The Earned Income Tax Credit (EITC) for the selfemployed has come closer to parity with the PAYE Tax Credit with the announcement of an increase of €150 to €1,500. However, the blatant discrimination that was due to finish in Budget 2018 has still not come to an end; the SFA will continue to campaign for the gap between EITC, and the PAYE Tax Credit (€1,650) to close fully in next year’s Budget. “Small firms are the backbone of the Irish economy, supporting them helps create and sustain jobs throughout the country. It is disappointing that Budget 2020 did not recognise their importance by introducing ambitious measures to support entrepreneurship,” Spollen-Behrens concluded.
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