Vol. 472 No. 4
81 Mr. Callely asked the Minister for Finance the incentives, if any, which are available to businesses which take advantage of business opportunities and financial risks; the proposals, if any, he has to encourage such development and financial risks; and if he will make a statement on the matter. [23416/96]
There is a wide range of incentives for business development and risk investment. These generally take the form of grant or subsidy schemes involving direct Exchequer subvention or tax reliefs involving tax revenue forgone. Information on the various grant and subsidy schemes currently available is a matter for the Minister for Enterprise and Employment and other relevant Ministers.
The principal tax incentives for business development are: the 10 per cent rate of corporation tax for manufacturing industry and certain internationally traded services; the 30 per cent rate of corporation tax for annual company or group income up to £50,000, introduced this year to assist small businesses operating in the services sectors; a reduced rate of capital gains tax of 27 per cent for equity investments of at least three years duration in small and medium-sized enterprises; capital gains tax rollover relief which assists entrepreneurs moving from one business to another by deferring any capital gains tax liability arising on such a move; capital gains tax retirement relief on the disposal of business interests by persons over 55 years of age; capital gains tax and stamp duty reliefs for company restructuring; capital acquisitions tax relief on the transfer of business assets by gift or inheritance; the business expansion scheme, which provides income tax relief for investors in companies operating in targeted areas of economic activity; the seed capital scheme, which is an income tax refund scheme aimed at encouraging enterprise in specified areas of economic activity; capital allowances for investment in plant, machinery and industrial buildings, including hotels, and tax incentives for investment in commercial, residential and certain industrial buildings in designated urban renewal areas and in designated seaside resorts.
The Government is committed to improving the tax environment for the business sector in the light of the evolving budgetary situation and the need to devote resources to reducing income tax, particularly for those in lower paid employment. Reductions in income tax will assist business development and employment by reducing payroll costs.
