Preliminary Tax – A Noose on New businesses

A great example of how messed up our country is at the moment can be summed up with one term Preliminary Tax. The double taxing of new businesses to stunt their growth.

hanging-manSome idiot in government during the boom years decided to increase the tax take they’d ask companies to pay next years taxes in advance and somehow the country awash with money let it slide by into law, after all banks would easily loan you the funds to pay off the burden, especially in the first year if you turned a decent profit. But what does this really mean for start up businesses in today’s economy? Well even extremely viable businesses can’t get credit from the banks, hell new businesses can’t even get bloody over drafts without jumping through hoops of flames. We just spent the next generations rainy day fund on, new businesses are being asked to pay TWO YEARS TAX in their first year of business, effectively stunting their chance of rapid growth.

The government needs to get behind new business and with SME’s accounting for the most of the potential jobs that will eventually get the country out of this recession, it’s farcical that their first years profits – the ones which are the most likely to be reinvested in the business, which in turn creates the jobs so desperately needed are being sucked up by the government. Ironically then simply passed back to unemployed pool, who would have had a job if the SME’s we’re allowed to grow and compete on the same playing field as a business who has been trading for several years. Talk about biting the hand before it feeds you. This seriously needs to be re-addressed in the current financial climate.

*Preliminary tax must be paid in its first accounting period for all new businesses that earn more than €200,00.

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