Written answers

Wednesday, 31 January 2007

Department of Enterprise, Trade and Employment

Economic Competitiveness

8:00 am

Photo of Shane McEnteeShane McEntee (Meath, Fine Gael)
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Question 172: To ask the Minister for Enterprise, Trade and Employment his plans to reduce the regulatory burden on small and medium enterprises; and if he will make a statement on the matter. [2596/07]

Photo of John McGuinnessJohn McGuinness (Carlow-Kilkenny, Fianna Fail)
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Question 185: To ask the Minister for Enterprise, Trade and Employment his views on whether ability to do business here is over regulated; if so, the action he is taking or planning to take to reduce the regularity burden on business here; and if he will make a statement on the matter. [2561/07]

Photo of Olivia MitchellOlivia Mitchell (Dublin South, Fine Gael)
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Question 199: To ask the Minister for Enterprise, Trade and Employment if he will instigate a review of the regulatory burden on small businesses; and if he will make a statement on the matter. [2595/07]

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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I propose to take Questions Nos. 172, 185 and 199 together.

International benchmarking reports suggest that the regulatory burden in Ireland is relatively light. The IMD (International Institute for Management Development) World Competitiveness Yearbook 2006 ranks Ireland 8th out of 61 countries surveyed for the extent to which bureaucracy does not hinder business activity. The World Economic Forum's Global Competitiveness Report 2006-07 ranks Ireland 17th out of 125 countries surveyed for having a low burden of government regulation.

While it appears, therefore, that Ireland enjoys a relatively favourable position, it remains important that every effort be made to maintain and improve this position, that the concerns of business are addressed on an ongoing basis, and that the work currently being done by our European neighbours does not see Ireland falling behind in competitiveness.

Towards that end, I established the Business Regulation Forum in November 2005 to investigate ways in which the burden of regulation on business could be reduced.

During 2006 the Forum collected evidence of the burden of regulation on business in Ireland. This activity can be treated under four headings. (1) The BRF invited submissions from interested parties on the regulatory burden on business, and received forty responses, which will be considered in detail. The issue was also discussed with relevant stakeholders some of whom were invited to present to the Forum at its monthly meeting. (2) The Forum liaised with international experts, both through inviting guest speakers to address the Forum's meetings and by visiting other jurisdictions to learn from their progress. (3) Two main research projects were carried out by the Forum. First, six case studies were completed, looking at the day-to-day regulations that businesses face. Second, a pilot study was carried out on ways of reducing the administrative cost to business of two specific regulations (based on the 'Standard Cost Model' which is an internationally used tool for measuring the administrative burden of regulations. (4) Finally, the Forum has reviewed work done in other fora. It has reviewed the work on regulation by the Small Business Forum and will also examine results of a new survey by the Revenue Commissioners. The Forum hopes that the final results of two projects being carried out by the Better Regulation Group, chaired by the Dept of the Taoiseach (ie a study of business attitudes to regulation and a regulatory 'mapping' project), will also be of assistance to their work.

Following this work during 2006, the Forum intends to present a report to me during the first quarter of this year, drawing conclusions from the material outlined above and making recommendations on taking the work forward.

In addition to the work of the Business Regulation Forum, and specifically relating to the small business sector, I would point out that I recently enacted legislation to raise the audit exemption thresholds applying to small companies in respect of turnover and balance sheet to €7.3m and €3.65m. respectively. (The previous thresholds were €1.5m and €1.9m.) This will remove the compulsory annual audit costs from the very large number of companies qualifying from the enhanced exemption level.

The Minister for Finance announced a package of measures in Budget 2007 aimed at:

Enhancing the Business Expansion and Seed Capital Schemes up to 2013 (subject to EU Commission approval of State Aid Rules)

Reducing the Administrative Burden on Small Businesses in relation to the payment of Corporation Tax, Preliminary Tax and the requirement for a Tax Clearance Certificate, by increasing the current thresholds which trigger such requirements. In addition, the Revenue Commissioners have been asked to explore further opportunities to reduce the tax compliance burden on all firms, large and small.

Increasing the VAT Cash Accounting and VAT Registration Turnover Thresholds from 1 March 2007 to simplify administration and reduce working capital requirements on small businesses.

Finally, the Company Law Review Group (CLRG) has finalised its work on the preparation of the General Scheme of the Companies Consolidation and Reform Bill and I understand that it expects to report on its findings shortly. The CLRG's proposals will bring the existing 13 Companies Acts into one and will make it easier for firms and practitioners to understand and comply with the law relating to the incorporation and operation of companies in Ireland.

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