Saturday, August 1, 2015

1/8/15: Ireland: No Country for Entrepreneurs?

Ah, the heady days of campaigning and promising are about to befall Ireland once again… soon… In the mean time, let us recall our Dear Leader's Enda "Business Dynamo" Kenny promise of the recent past:

On January 27, 2011, our pro-business Leader uttered the following: “I will seek the trust of the Irish people to implement Fine Gael’s plan to get Ireland working again… I firmly believe that by 2016, Ireland can become the best small country in the world in which to do business, the best country in which to raise a family and the best country in which to grow old with dignity and respect.”

Let's leave the family and old dignity bits to the softer side of the Coalition and focus on the first promise, squarely relating to economics.

On October 8, 2011, Mr Kenny repeated the said promise: "Since coming into office 7 months ago I have told nearly all audiences that by 2016 I intend to make Ireland the best small country in the world in which to do business…"

And then again, on February 28, 2013 the "Dynamo" spun again: "Those of you from Ireland will have heard me say many times that my ambition is for Ireland to become the best small country in the world for business by 2016. It is an ambition I believe we will achieve. The scale of reform and action across Government to improve our competitiveness is unyielding until we reach our goals."

There are many things going on here, perhaps unbeknownst to Mr. Kenny. But one thing is pretty darn clear - Ireland is nowhere near being a half-decent place to become an entrepreneur. Why? Read this: "The reality is that there is no incentive tax-wise for Irish entrepreneurs" Authored by an entrepreneur and an investor.

Those of you who follow my work have known for ages that I advocate complete reform of our tax codes in relation to:

  1. Employee share ownership plans and options; 
  2. Capital gains taxation, especially linked to subsequent reinvestment of business sale proceeds; 
  3. Self-employment taxation system; and
  4. Employees, directors and owners system of reimbursement, with a direct link to their investments in business.

Those of you who are entrepreneurs in Ireland known that none (in contrast to Mr Kenny's assertions) of these (and other) key areas of Ireland's competitiveness have been reformed or improved by the current Government. I repeat: none.

Instead of creating a culture of real enterprise and entrepreneurship, Mr. Kenny is confusing pro-business (incumbent MNCs) agenda for real enterprise agenda. Thus, he continues to pile mile high various investment schemes, grants, incentives that create political subsidies to favoured entrepreneurs and companies at the expense of normal entrepreneurs and companies, that distort rates of return on investment, and incentivise rent seeking. Meanwhile, real entrepreneurs are faced with huge tax demands, tax uncertainty and legal bills to plan for these.

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