On Thursday 18 December, the Taoiseach, Mr. Brian Cowen launched “Building Ireland's Smart Economy: A Framework for Sustainable Economic Renewal”.

According to the Government press release, the Framework is described as setting out in a realistic and sustainable way, how the Government proposes “to re-orientate and reprioritise its business over the next few years so as to weather the global economic storm.”

The publication “Building Ireland's Smart Economy” is available at http://193.178.1.117/attached_files/Pdf%20files/Building%20Ireland's%20Smart%20Economy.pdf.

The ICAI press release is reproduced below:

“'Smart Economy’ plan – Work of Taxation Commission should be accelerated says ICAI

The Institute of Chartered Accountants in Ireland (ICAI) is disappointed to note that no new tax initiatives are to be deployed in the “Building Ireland's Smart Economy” plan presented today. Though tax features prominently in the plan, there is little other than a listing of aspects already in our tax code.

Any suggested future changes are predicated on the work of the Commission on Taxation, which still has almost a year in which to report. In this respect, the work of the Commission should be accelerated with a view to producing early recommendations in areas highlighted in today's plan.

“We believe that a focus on developing Ireland's capacity as the location of choice for high tech business is well worthwhile. Such businesses create value and long term jobs, and the rewards for successful R& D are very high. In this context the Taoiseach may be correct in highlighting aspects of the Irish Tax System such as R&D relief and concessional tax treatment for some of the returns from investments in high tech companies” said ICAI Director of Taxation Brian Keegan.

“But the fact is that these measures have already been presented in the Finance Bill, debated in Dáil Éireann and will most likely become law very soon. There is no fundamental reform here of our tax environment for high tech business. In particular, we need to incentivise the innovator.”

ICAI feels that a comprehensive package of tax measures, comparable to that offered initially for the IFSC, is necessary if we are serious about attracting and developing world class research and innovation. ICAI notes the promises of reform which is needed in the areas of Intellectual Property, because Ireland is not in line with 21st century approaches. We also need to restructure the tax rules for trademarks and brands to recognise that these too are important assets for high tech companies. Our R&D Tax Credit system and the BES rules need to be simplified-the former works against longer established companies in granting relief for R&D activity, the conditions attaching to the latter disqualify many good businesses from raising funds.”