Small Firms Association (SFA) chairman Mr Kieran Crowley yesterday called on the Taoiseach, Mr Ahern, to roll back part of the proposal to levy PRSI on company perks from next January.
Addressing the Taoiseach, who was the guest of honour at yesterday's SFA annual lunch in Dublin's Burlington Hotel, Mr Crowley labelled as "crazy" a plan to class some commercial vans as a benefit-in-kind (BIK), because employees drive them to and from work.
Classing the vehicles as BIKs means that, from next January, employers would be subject to a 10.75 per cent PRSI charge on their value to workers. Staff using them in this way would be liable for 4 per cent PRSI, the 2 per cent health levy and income tax.
Mr Crowley said that imposing the charge would force workers to drive their own cars to their employers' premises, collect the commercial vehicles and then make an extra journey over the same roads, adding to traffic congestion. Mr Crowley bluntly demanded that the Government drop the proposal.
Under the terms of this year's Finance Act, the Government plans to levy PRSI on perks, from January 1st, such as company cars and other benefits that employers give to workers. The plan will add €107.50 to an employer's tax bill for every €1,000 worth of BIK given to employees.
Employers have already voiced their concerns at the likely increase in costs. BIKs are already subject to income tax. However, Revenue Commissioner sources say preparations to apply the PRSI charges have revealed that some employers do not return some benefits given to their employees for income tax.
Mr Crowley said the high insurance costs, singled out by a majority of SFA members as the main threat to their businesses, had not come down. He called for the speedy introduction of measures aimed at reforming the market, including the personal injuries assessment board and proposed law reforms designed to deter false and exaggerated compensation claims.
"Premiums are not falling yet. More has been said than has been done on this issue. We want to see instant and early delivery of all the plans to reduce the cost of insurance," he said.
