Vol. 530 No. 4
124 Mr. McCormack asked the Minister for Finance the reasons for his recent decision to abolish the ceiling on employer's PRSI; if his attention has been drawn to the fact that the extra cost that this will add to firms employing large numbers of people; the plans he has to redress the situation; and if he will make a statement on the matter. [4136/01]
As I stated in my budget speech in announcing the PRSI changes, I have favoured, for some time, simplifying the whole area of PRSI and levies which over the years has become quite complex and cumbersome from an operational perspective. The various PRSI measures introduced represent the first steps in the reform process. Moreover, I have already signalled my intention to continue with the rationalisation process in my next budget and the various views which have been expressed in the matter will be borne in mind at that stage.
I believe that the abolition of the employer's contribution ceiling needs to be viewed in the wider context of the improved general business climate in recent years. I appreciate that not all businesses have benefited from the significant corporation tax reductions achieved to date but, nevertheless, very many have. In addition, the substantial improvement that I announced in the budget in the capital allowances for plant and machinery will benefit a wide range of enterprises. Overall, therefore, the environment for business continues to be very positive.
Finally, I would like to point out that, notwithstanding the budgetary measure, the PRSI rate for employers in Ireland compares very favourably with the EU norm.
