Peter Fitzpatrick (Louth, Fine Gael) | Oireachtas source

The Bill implements the taxation measures announced in budget 2013. In addition to introducing the tax increases announced on budget day, the Bill builds on the SME supports introduced in the budget and includes a number of new measures to support them. The SME sector will be the driver of the economic recovery across the country and the Government is committed to supporting this key sector. This is why the primary focus of budget 2013 and this legislation is on jobs and, specifically, why the Government prioritised the introduction of measures that will support the sector. SMEs are the key providers of jobs throughout the State and with the loss of 250,000 private sector jobs between 2008 and 2011, the sector will lead the recovery in the domestic economy and create the jobs to make serious inroads into our all too high unemployment level. Each of the measures in the Bill is designed to help this critical sector to trade, invest in new products, enter new markets, sustain existing jobs and create new ones. These initiatives will build on the supports available through Departments and agencies and the measures introduced to support credit flow into the sector.

The ten-point tax reform plan was announced in the Budget Statement. This plan includes measures that will make a difference for the SME sector such as reforming the three-year corporation tax relief for start-up companies, increasing the tax receipts basis threshold for VAT, amending the close company surcharge to improve the cash flow of SMEs and extending the foreign earnings deduction for work-related travel to certain additional countries.

The Bill gives effect to auto diesel excise duty relief for licensed and compliant hauliers. Following consideration, the relief will be extended to the licensed passenger transport sector. The relief will take effect from 1 July 2013 and the amount of relief will be linked to the price of auto diesel with the maximum amount of relief being 7.5 cent per litre.

As well as being extended for a further seven years from 2014 to 2020, the employment and investment incentive will be amended to allow the operators or managers of hotels, guest houses and other self-catering accommodation to qualify subject to review after two years. The hotel sector currently employs approximately 51,000 individuals and the extension of the incentive to cover investment in the sector will help to sustain these jobs and potentially create additional employment.

The Bill also provides for measures announced in the Budget Statement to enable farm restructuring. Capital gains tax relief will be available where proceeds of a sale of a farm are reinvested for restructuring purposes. The relief will also apply to farm land swaps subject to certification by Teagasc for all transactions seeking relief. The commencement of the relief is subject to receipt of EU state aid approval.

The Bill also provides that individuals will be allowed a once-off option to withdraw up to 30% of the value of AVCs made to supplement retirement benefits. Withdrawal will be liable to tax at the marginal rate and the option to withdraw will be available for three years following the passage of the Bill.

The legislation also provides for changes to the USC. Standard USC rates will apply to those aged 70 and over and to medical card holders - both PAYE and self-employed income earners - who have income in excess of €60,000 per annum. The current lower rate of USC, which applies until the end of 2013, will continue in place for all other relevant income tax earners. The Bill also contains an additional measure to improve the access of SMEs to the "key employee" provision of the research and development tax credit regime. Under current legislation, to qualify for the credit an employee must spend at least 75% of his time working in research and development and this threshold is being reduced to 50% to assist SMEs to avail of this provision.

On a daily basis in my constituency office in Dundalk, people are saying Ireland is on the road to recovery from the biggest downturn in the history of the State. I commend the Bill to the House.

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