Tax incentives, such as Business Expansion Schemes (BES), provide much-needed funding for start-up businesses in this country, and should not be derided as 'tax loopholes' by Revenue sources, KPMG said yesterday.
Tax partner Jim Clery said that sticking income into a tax shelter for a year and then withdrawing it could be described as using a 'tax loophole'. "However, investing one's money for five years in a small-business venture which may or may not succeed does not constitute using a tax loophole," he said.
Many technology businesses and tourist accommodation facilities would not be in existence without BES capital, he said. "Two of the leading Irish technology companies got started with BES funds and it is quite common for entrepreneurs and employees to pledge their money to a company to get it started. That's not 'loopholes for the wealthy'," he argued.
