The head of Irish Venture Capital Association Brian Caulfield has voiced his dissatisfaction with how Ireland taxes entrepreneurs.
Ireland’s tax system harms entrepreneurial ambitions in the country, Brian Caulfield (pictured), president of Irish Venture Capital Association (IVCA), told news publication Sunday Independent.
IVCA represents Ireland’s venture capital industry, and claims that some 1,000 companies in the country have secured more than €2.1bn ($2.4bn) in venture capital funding since 2008.
Entrepreneurs in Ireland are faced with a lack of social welfare support and no tax credits while still being subject to a 3% Universal Social Charge, a type of income tax introduced in 2011. They also need to pay 33% capital gains tax when they sell their business.
Caufield, who is also a partner at venture capital firm Draper Esprit, echoes the views of a range of other people such as Terence O’Rourke, chairman of the government’s development agency Enterprise Ireland.
The country’s Department of Jobs has also asked for changes including a cut in capital gains tax and a new share option scheme aimed at small and medium-sized enterprises.
Michael Noonan, minister for finance, meanwhile acknowledged the problems and claimed the government will enact changes in the next budget. He has, however, not given any details.
Caufield concluded: “There is a lack of joined-up thinking. On the one hand, Enterprise Ireland is actively seeking to support VCs. But on the other hand, the government makes it very difficult to invest in venture capital funds.
“The industry would like to see government facilitate and encourage Irish pension schemes to invest in VCs.
“The other thing is that there is a funding crunch coming. Venture capital funds at seed stage and at the series A stage are running out of capital. Potentially, companies are really going to struggle. Government needs to be really conscious of that.”