Phil Hogan (Carlow-Kilkenny, Fine Gael)

I do not oppose these resolutions. Resolution No. 4 is an important measure and the package of resolutions for small business brought forward by the Minister for Finance is welcome. Over the last few years the indigenous sector has been hit with many additional regulatory burdens. Better regulation documents have floated around the Department of the Taoiseach over recent years. Regulatory burden is supposed to be assessed on the basis of necessity and proportionality. Until now I have seen no evidence of this.

The principle the Minister has brought forward in this resolution is a first step towards removing an unnecessary paperwork burden that has accumulated over a number of years for fledgling businesses that are trying to get off the ground. Although a modest number of companies will be exempt, I do not denigrate the resolution. The Minister has broken the ice on establishing this principle. Because a turnover of €70,000 for goods and €55,000 for services is not a large amount, I am sure the number of companies exempt will be small.

The form filling and bureaucracy a start-up business must go through requires urgent attention by the State. Small business people are the kingpins of the national economy as regards going through the frustrating experience of getting started. The various monthly and bimonthly returns in VAT and tax are cumbersome for fledgling companies that lack the expertise or the wherewithal to employ the necessary accounting expertise to get started. The future of our national economy will be more dependent on small, Irish businesses, entrepreneurs in our own jurisdiction, rather than foreign direct investment. I have sought these changes in the past and I acknowledge that the Minister has taken the first step.

The other package of measures in the small business sector is equally important and valid. One of the measures was initiated during the 1994-97 rainbow Government when we exempted from tax liability the profits of small businesses under €50,000. This builds on that up to €150,000 related to corporation tax liability and the timing in which it was made. My one criticism of the Government over the last number of years is that it has tried to make ends meet in its Exchequer figures by bringing capital acquisitions tax, capital gains tax and particularly corporation tax liability forward into the current year of operations that will generate the tax liability. It is the only sector that must pay money to the Revenue based on money it has not yet earned. Paying corporation tax before the end of the current tax year for notional income that will accrue by the end of December is unfair and should be examined in future budgets. However, I support the resolution and the expansion of the VAT thresholds. The Minister for Finance has done a good day's work in exempting businesses with small turnovers from VAT and getting them started. We should examine other regulatory burdens on small businesses that could be removed, particularly for the first year or two, or below a particular turnover, to get them started and give them a breathing space from the bureaucracy they must go through.

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