As budget looms, we must strive to incentivise the SME sector

While we may disagree with the EU on certain tax measures, we can’t disagree when it says that ‘SMEs are the backbone of Europe’s economy’

There are two main reasons for supporting tax incentives to SMEs: first, there are market failures that affect SMEs, and second, the tax system has a disproportionately negative impact on them. Picture: Getty/iStockphoto

Last week’s Summer Economic Statement explained that a total package of €1.05 billion is being provided for in Budget 2023 on the tax side. That’s double the amount set out in the original strategy and, as it states, “reflects the need to adjust the parameters given the higher-than-assumed inflation”.

It also states that it will focus on the need to adjust income tax bands and credits, so that workers are not “dragged” into higher levels ...