Jobs Intiative Scheme May 2011
Jobs Initiative Scheme 2011
A private pension levy shall fund this scheme
The much anticipated Jobs Initiative Scheme that was one of the cornerstones of Fine Gael/Labour Programme for Government was finally announced on May 10th 2011. The objectives of the above scheme are as follows:
Ø Job Creation
Ø Restoring Confidence in our economy
Ø Providing incentives that shall increase tourism in Ireland.
The aspects that will be implemented to assist the aspect of Job Creation are as follows:
Ø The halving of employers PRSI for low paid workers below € 356 a week that will affect 600,000 workers.
Ø Additional places shall be provided on a range of training courses and internship schemes with 5,000 places available. Those who take park in the above internship scheme shall receive € 50 on top of their social welfare entitlements.
Ø The Department of Finance is liberalising the taxation treatment for Research and Development activities and reducing employers PRSI on share options awarded to employees.
Ø Visas that are valid for visitors to the United Kingdom from a number of countries shall also be valid for Ireland.
Ø A Micro-finance Start-Up Fund will be established to provide loans for small businesses.
A number of polices have also been development to stimulate the Tourism Sector in Ireland and they are as follows:
Ø A Value Added Taxation reduction will come in effect from 13.5% to 9% on a range of activities that include the following:
o Restaurant and Catering Services
o Hotel and Holiday Accommodation
o Entertainment Services such as cinemas and sporting facilities.
o Hairdressing and printed matter that will include newspapers and magazines but not books.
Ø The controversial € 3 air travel tax shall be suspended (Provided that airlines open new routes and boost passenger numbers. The Government has stated that this tax shall be reintroduced if airlines do not do so).
The above Value Added Tax reduction shall come into effect from 1st July 2011 until the end of 2013 where it shall be reviewed. Minister for Finance Michael Noonan has stated that the above initiatives are the first step to improve our economic competitiveness and encouraging employment.
How will this be funded?
The Government announced that it intends to introduce a 0.6% levy on private pension funds in order to finance the above measures. This new levy that is intended to raise € 470 million a year that will operate over a term of four years with an objective to raising € 1.88 billion. However it will not apply to non-residents or pension funds already in wind-up before 10th May 2011.
This new levy has received a somewhat hostile response from opposition parties and various economic commentators. In response to this reception Taoiseach Enda Kenny has reiterated that the rationale for this new levy is that the bulk of pension fund assets are held offshore and this mechanism will bring some funds back into Ireland to fund job creation.
John McCarrick
John McCarrick and Associates
11 Dunville Avenue, Rathmines
Dublin 6,Ireland
Telephone:01 4960102
Fax: 01 4973717
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