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Who's afraid of the big, bad tax man? Small business is, apparently

SME confidence keeps improving, but rising tariffs and wage bills are getting in the way of growth.

Image: Tax man via Shutterstock

MOST IRISH SMALL businesses are feeling better about their financial prospects now than before the crash – but their fears about rising taxes and higher wage bills are still standing in the way of growth.

A PwC survey of Irish small- and medium-sized businesses (SMEs) found 54% of bosses thought their companies were in stronger shape now than before the financial crisis five years ago.

But a solid share, 27%, still thought their businesses were in worse financial health and 70% expected their expenses to keep growing, with a rising tax burden and labour costs among the biggest worries.

Overall the picture was positive for most traders and 87% said they were feeling good about the Irish economy for the year ahead.

The hurdles

High personal taxes and the number of new business tariffs that had been introduced recently were the chief concerns for most SMEs, although 78% of those surveyed said growing labour costs were the number-one threat to their growth.

“The challenge will be can these pressures be absorbed by the business and passed on to the market,” the report said.

Wage levels are critical as Ireland strives to remain competitive domestically and internationally.”

Nearly two-thirds of businesses said their inability to finance growth was a problem and only 28% said it was now easier to get a loan than a year ago.

SMEs in growth mode

PwC’s Brian Bergin said the surveyed showed most Irish SMEs were in “growth mode” and felt positive about their business prospects.

However, challenges still remain in this very important sector for Ireland including access to finance, skills shortages, wage pressures and increasing tax burdens,” he said.

The latest survey comes after another recent poll found a big share of SMEs were expecting to hire staff before the end of the year, although even more were forecasting their wage bills would rise before 2015.

READ: More jobs coming as Irish firms get ‘back on feet’

READ: SMEs dipping back into loans from ‘bailed-out banks’

About the author:

Peter Bodkin  / Editor, Fora

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