The National Pension Fund will invest in small business and the Government will bring forward measures to cut enterprise costs and ease cash pressures under proposals included in Budget 2013.
At a briefing following the budget speech, the Minister for Jobs, Enterprise and Innovation, Richard Bruton, restated the Government’s commitment to maintaining the Republic’s 12.5 per cent tax on corporate profits and said that Budget 2013 aimed to aid job creation through cutting business costs and supporting investment.
The Government is establishing a €175 million seed and venture capital scheme that, which Mr Bruton said was a “new round” of funding, to support 100 companies in creating new jobs and export opportunities.
The Minister said his department hoped the private sector would match this on a three-to-one basis, bringing in a further €225 million and bringing overall investment to €500 million.
The National Pension Reserve Fund (NPRF) is developing support pots for small business, ranging in size from €100 million to €400 million, which will provide either equity investment or credit.
The Minister said that the amount of credit available to businesses under this scheme would start at €50,000-plus, but equity investment would involve “far higher” amounts.
A package of new tax measures aimed at supporting small and medium-sized businesses includes changes in the rules for accounting for VAT receipts aimed at boosting cash flow.
Extending the Employment Investment and Incentive scheme to 2020, it was due to run out next year.
The scheme provide income tax relief of up to 41 per cent on investments of up to €10 million per company and is one of a range of measures designed to encourage businesses to hire unemployed people.
The Government plans to double the amount of spending that will qualify for the research and development tax credit for small and medium-sized enterprise.
The corporate tax-relief scheme for start-ups has been improved. This allows relief on tax on profits of up to €320,000 in the first three years of a business’s life.
The new proposals mean businesses will be able to carry forward the relief if they cannot avail of it during their first three years.
The Department of Jobs, Enterprise and Innovation’s capital budget will be €505 million which will be used to support the IDA in bringing in 13,000 new jobs next year.
It will also be spent on supporting the department’s own “Action Plan for Jobs 2013”.
