Ivan Yates
Ceist:51 Mr. Yates asked the Tánaiste and Minister for Enterprise and Employment her views on the changes, if any, in the tax system which are necessary to encourage entrepreneurship. [13733/97]
Written Answers. - Taxation System.
The taxation system has in the past played an important role in Ireland's industrial success. It is my intention to encourage enterprise and increase the competitiveness of business using whatever means are appropriate. In furtherance of this objective the programme for Government sets out this Administration's proposals as to how the tax code might provide a further stimulus in promoting a spirit of entrepreneurship amongst Ireland's young working population.
In particular, it is the intention of this Government that the standard rate of corporation tax post-2010 should be a continuation of the current 10 per cent manufacturing rate. The continuation of the 10 per cent rate of corporation tax will send a strong and positive signal to both potential overseas investors and prospective Irish entrepreneurs of this Government's intention to maintain a tax competitive environment for Irish business.
In considering the detailed changes that are likely to become necessary to the taxation code in implementing a 10 per cent standard rate of corporation tax post-2010, and bearing in mind the likely contraction of the volume of EU funding for Ireland from its current level after 1999, the Government proposes reviewing a number of the existing tax reliefs which are available for promoting business activity with a view to increasing their efficiency and effectiveness.
It is the intention of this Government to examine the existing capital tax structures with a view to establishing whether a greater spirit of entrepreneurship might be promoted through modification of existing capital tax rates, and-or allowances.
Additionally, as the Deputy will be aware, the policy document for this Government published jointly by both the Progressive Democrats and Fianna Fáil entitled An Action Programme for the Millennium sets out the objective of reducing the basic rate of income tax to 20 per cent and the higher rate of income tax to 42 per cent over the next five years in addition to effecting significant increases in both the standard rate band and individual tax allowances. This initiative will provide a further impetus to those who are employed as it will enable them to take home a greater proportion of their earnings. As such these proposed changes in the income tax code will provide an additional boost to the economy and give further encouragement to the spirit of entrepreneurship among Ireland's young men and women.
It is my intention that this Administration will use every opportunity, whether through tax reform, education, or any other means, to foster and promote a sense of entrepreneurship within the population as a whole.