FDI seeks tax and enterprise support for sector in budget submission
Government has been urged to introduce a series of measures to help the food and drink sector respond to Brexit and support the development of indigenous enterprise by Ibec group Food Drink Ireland (FDI), in its Budget 2020 submission.
Launched today, Thursday, August 1, the budget submission calls for improvements in tax policy to support the development of indigenous enterprise.
It outlines 19 improvements to Capital Gains Tax entrepreneur’s relief, the research and development tax credit model, the EIIS scheme and excise relief for certain craft drinks producers.
In addition, FDI seeks a measure on controlling the cost of doing business in Ireland – with a particular focus on commercial water rates and insurance.
The industry representative group highlighted that the agri-food industry has deeper links to the wider economy than the rest of manufacturing, noting that it accounts for half of direct expenditure by the entire manufacturing sector in the Irish economy.
It was noted that the sector has a high employment multiplier, which means it supports employment in other parts of the economy in a way that other sectors don’t.
It is therefore also at the heart of the social fabric of rural Ireland, according to the group.
Paul Kelly, FDI director, said: “€4.5 billion worth of food and drink exports go to the UK.
“In the event of a no-deal Brexit and the immediate imposition of tariffs, decisive steps would need to be taken.
Tariffs are in effect a tax on trade and commerce and FDI is calling for their recycling into a tariff stabilisation fund to offset serious damage to exports and job losses.
“Every Brexit scenario is negative for the sector and companies will also need support to diversify products and market focus, innovate both products and processes and re-align their business models to mitigate the impacts of such a market shock.
“Funds amounting to 5% of the value of current export sales to the UK will be needed annually for three years from domestic and EU sources to help Irish companies innovate, diversify into new markets, train staff and invest for the future in capital towards enabling technology, carbon efficiency, plant renewal and expansion geared to improved competitiveness.”