The finance industry’s main representative association, Financial Services Ireland (FSI), has warned against any increases in taxation that would adversely affect its members in Budget 2004. According to the FSI’s Budget submission, the industry also believes the Minister for Finance, Charlie McCreevy, should concentrate on restoring competitiveness to the sector.
An affiliate to IBEC, the FSI has a membership base of over 180 financial institutions, including banks, building societies and investment companies. In their submission they have highlighted the broad economic concerns they believe the Minister should deal with this December and made some suggestions as how to enhance the competitiveness of the Irish financial sector.
The move to extend PRSI and the health levy to benefits in kind by employers in last year’s budget, the FSI believes has had a negative impact at a time when net growth in the private sector is weak and is warning against any further increases in labour taxation.
FSI also reiterated its opposition to the bank levy and stamp duty measures introduced in last year’s budget as they say they have imposed an additional cost burden on the banking sector. It believes the Minister should review the measures in this year’s budget and avoid any increases in indirect taxation or the introduction of stealth taxes.
Furthermore there is a warning to the Minister of the uncompetitive position companies in the international financial services find themselves in due to fiscal measures imposed on them. Section 403 of the Taxes Consolidation Act, 1997 places limits on the relief which is available in respect of capital allowances on leased plant and equipment.
It only permits a group to offset capital allowances on leased plant equipment against income from the leasing of plant and equipment. This ‘ring-fencing’ the FSI says is a weakness as it means that asset financing companies in other jurisdictions have, up-front, a lower effective tax cost on the leasing transaction than an Irish lessor. |
