Belfast Telegraph

Saturday 26 July 2014

Warning over excise rates hike

Business leaders have claimed increased excise rates could harm the fragile economy

An increase in excise rates will cost jobs and squeeze struggling consumers, it has been claimed.

Business group Ibec said jobs recovery significantly exceeded expectations in the first half of the year, but warned Budget 2014 must support the progress being made.

Ibec chief economist Fergal O'Brien warned that unemployment remains at crisis level.

"Any excise, VAT, or PRSI increase will directly hit the number of new jobs next year," he said.

"We simply cannot afford to take more money out of the domestic economy.

"Irish excise rates are already among the highest in Europe. Any increase would cost jobs, further squeeze struggling consumers and potentially reignite cross-border shopping.

"The Irish exchequer gains nothing if trade is simply pushed north of the border."

Its jobs report found employment increased by 34,000 over the last year to the end of June, with 8,259 new jobs announced in the past six months, and over 2,100 in September.

Ibec stressed the need for Budget 2014 to support the progress made by not increasing excise, VAT, or PRSI.

Meanwhile Isme, the Irish Small and Medium Enterprises Association, said the length of time its members has to wait to be paid has improved in recent months.

It found bosses were being paid for goods or services within an average 63 days, the shortest period since spring 2008.

However 30% are still waiting three months or more, with 4% waiting more than 120 days, and 17% being kept longer for a payment.

More than 1,100 managers or owners took part in the credit watch survey, which covered April to June.

Mark Fielding, chief executive at Isme, said the figures were encouraging.

"However, the fact that 80% of SMEs are afraid to charge interest on late payments, as is their right, demonstrates once more the failure of the legislation," he said.

"Two thirds (67%) have to accept the credit terms dictated by big business customers, further proof of the impotence of the legislation."

The association has demanded a strict statutory 30-day payment regime for all businesses trading within Ireland, to be phased in over three years, which it wants championed by Taoiseach Enda Kenny.

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