2015 Forecast For Exporters

2015 forecast for exporters

Prospects for Irish exports in 2015 have improved largely as a result of the diminishing impact of the patent cliff effect and the continued success of Irish food and agricultural related exports. However, the export sector is struggling on a number of fronts. Budget 2015 must support the development of a stronger export drive by adopting measures that address a number of urgent issues and implement specific policy measures identified by Irish exporters as critical to their efforts to expand their businesses. To stimulate the development of the Irish export sector, the IEA (Irish Exporters Association) recommends the Government should consider the following for the 2015 Budget.

  • Increase the entry point to the income tax rate from €32,800 by 10%.
  • Reduce the marginal tax rate in income tax by 1%.
  • Reduce the rate of employer PRSI on lower paid workers to the pre- 2014 levels of 4.25%.
  • Reduce the top rate of USC by 1%.
  • Extend Foreign Earnings Deduction Scheme beyond 2014. Expand number of qualifying countries and increase maximum deduction to gross deduction of € 50,000 p.a.
  • Expand R&D benefits and decrease the period required to obtain R&D tax benefits.
  • Introduce 100% tax relief in the year of investment in Investment Incentive Scheme and reset investment period should at 5 years.
  • Maintain current 12.5% corporate tax rate.
  • Allow carry forward unused withholding tax credits to future periods and make available for off-set against future tax liabilities.
  • Give corporation tax benefits to companies generating IP in Ireland.
  • Expand schemes such as the Internet and innovation voucher programs for SMS’s.
  • Guarantee first time export grant to be spend on export related supports.
  • Ensure that more long-term loan capital is made available to mid-sized companies.

 

(IEA Pre-Budget Submission 2015)

 

The IEA suggest that exporters who are subject to withholding Tax in foreign countries and are unable to offset it in the current year on their Irish taxes, should be able to carry unused withholding tax credits forward. By carrying these forward they will be available for off-set against future corporate tax liabilities.

Alan McQuaid an economist at Merrion Stockbrokers said, "As regards 2015, it will be difficult to increase and actually maintain market share in an ever more competitive environment even with the benefit of a sharply weaker euro, though Irish exporters should continue to perform well on a relative basis.”

Export led growth will be the main driver of faster growth in real GDP which will in turn determine our success for increasing employment and the elimination of Ireland’s fiscal deficit and reducing the national debt to GDP ratio.

Ireland is one of the biggest exports of pharmaceuticals in the world (28% total exports), organic chemicals (21%), data processing equipment and software (12%) and food (8%). The EU (European Union) accounts for 60% of total exports.

The main export partners are:

  • United States 23%
  • United Kingdom 16%
  • Belgium 14%
  • Germany 7%
  • France 5%
  • Switzerland 4%

Exports in Ireland decreased in January to €8.351bn from €8.794bn in December 2014. From 1970 until 2015 exports in Ireland averaged €3.358bn, it reached an all-time high in August of 2012 with €9.188bn – CSO.

It is imperative that more funds are available to the SME sector. The Government must ensure that more long-term loan capital is made available particularly for mid-sized companies in Ireland. The lack of State Backed Export Guarantees puts Irish exporters at a competitive disadvantage to other countries such as the UK, France and the US who do have them. The IEA recommends that the Government needs to urgently look at reintroducing a scheme, which could be run by the private sector to restore our competitiveness in this area.

The Post Coach has teamed up with some of the largest courier companies in the world, the benefit of this is that SME’s can save on costs. For more information on our parcel and pallet delivery service at discounted prices for importing and exporting, contact us today on fiona.black@thepostcoach.com.

loading