What Ireland’s cost-cutting business reforms mean for SMEs

Cost of Business Forum sets out 63-point plan to ease pressure on Irish SMEs, including suggested reforms in regulation, tax compliance and energy.

Irish businesses could see significant relief from rising operating costs if the Government acts swiftly on the 63 recommendations contained in the final report of the Cost of Business Advisory Forum, according to business representative groups who have welcomed the publication of the long-awaited review.

The report, commissioned by Enterprise Minister Peter Burke, TD, and chaired by former Competition and Consumer Protection Commission chair Kevin Foley, sets out a broad programme of measures aimed at reducing business costs, easing regulatory burdens and strengthening the competitiveness of small and medium-sized enterprises across Ireland.

Among the key recommendations are reforms to energy regulation, banking competition, tax administration and business reporting requirements, alongside measures designed to simplify licensing, planning and compliance obligations.

Focus on energy costs

Energy emerged as one of the most significant cost pressures facing businesses during the Forum’s deliberations.

The report recommends amending the mandate of the Commission for Regulation of Utilities (CRU) so that affordability and competitiveness for businesses are explicitly considered when approving multi-annual network investment plans.

Additional proposals include a review of state-imposed charges on business energy bills, consideration of a state-led energy price reduction mechanism for major energy users and the introduction of accelerated capital allowances for business energy audits.

The recommendations reflect growing concern among businesses that high energy costs continue to impact investment decisions, operational planning and overall competitiveness.

Reducing red tape

A central theme of the report is the need to reduce administrative complexity for businesses.

The Forum recommends stronger implementation of the SME Test across Government, including a formal “comply or explain” approach that would require departments to demonstrate how the impact of proposed regulation on smaller firms has been assessed.

The report calls for audits of existing regulations that increase business costs, reforms to permits and licensing processes and a range of tax administration improvements intended to reduce paperwork and compliance obligations.

The Forum also identified banking and borrowing costs as a major challenge for Irish enterprises. The report proposes an expanded role for financial regulators that would take greater account of market competition and business affordability, while supporting the development of alternative lending channels and more efficient payment systems.

Chartered Accountants Ireland, which represented its 40,000 members on the Forum, described the recommendations as a practical roadmap that could deliver meaningful benefits for businesses if implemented.

“Today’s recommendations reflect the strong engagement we had with the Minister and his officials, and we are pleased to see recommendations aimed at reducing regulatory and tax compliance burdens,” said Cróna Clohisey, director of Members and Advocacy at Chartered Accountants Ireland.

“They reflect concerns businesses have consistently and increasingly raised with us and, if implemented, would make a meaningful difference for SMEs and businesses across the economy. Crucially, at a time of geopolitical upheaval and uncertainty, many of these recommendations can be implemented by government, providing almost immediate relief to businesses.”

She highlighted several recommendations long advocated by the Institute.

“We are particularly pleased to see recommendations to reform Revenue’s Enhanced Reporting Requirements, including the removal of real-time reporting; the simplification of the Form CT1 corporation tax return; and stronger application of the SME Test with a formal ‘comply or explain’ requirement across Government. These are practical measures that we have strongly advocated for and would help greatly to reduce unnecessary administrative burdens.”

Clohisey said growing compliance demands continue to weigh heavily on SMEs.

“Businesses want to comply, but increasing regulatory complexity comes at a cost. We survey our SME members twice a year and 54% identify reducing regulatory and compliance burdens as the single most important support Government could provide. Today’s recommendations recognise that competitiveness depends not only on taxation and investment, but also on making it easier for businesses to operate and grow.”

Focus must shift to delivery

While welcoming the report, Chartered Accountants Ireland stressed that implementation would require coordinated action across Government departments and agencies.

“Minister Burke has produced a strong report that reflects business concerns. The recommendations are practical, achievable and deserve prompt implementation. Now Government needs to deliver them.

“Reducing the cost of doing business is not a matter for one department alone. It requires a coordinated approach across Government, including Revenue and a range of other departments and agencies.”

Clohisey added: “Competitiveness is a central priority for Ireland during its Presidency of the Council of the European Union, and today’s recommendations are an opportunity to demonstrate a laser-like enterprise focus in the coming months.”

Dublin Chamber also welcomed the publication of the report, noting that many of its recommendations reflect proposals championed by the Chamber and wider Chamber Network through the Forum process.

The organisation’s director of Public and International Affairs, Aebhric McGibney, represented the Chamber on the Forum following his nomination by Chambers Ireland.

McGibney said businesses continue to face mounting pressures across a range of cost categories.

“Businesses in Dublin are operating in an increasingly high-cost environment. Energy, insurance, finance and compliance costs all feed directly into the cost of operating, investing and creating jobs. Government needs to look not only at each of these costs individually, but at their cumulative impact on businesses.”

He welcomed the report’s emphasis on regulatory reform and improving the SME Test.

“We are pleased that the report reflects a number of proposals Dublin Chamber has been advocating for. In particular, strengthening the SME Test and requiring Government Departments to ‘comply or explain’ should help ensure that the cost of new regulation on smaller businesses is properly considered before it is introduced.”

McGibney said regulation should be proportionate and practical for smaller firms.

“Businesses understand the need for regulation, but the administrative burden attached to it must be justified and designed with the capacity of smaller firms in mind.”

He also pointed to recommendations aimed at simplifying permits and licences and reviewing regulations that add to business costs.

“The same principle should apply across Government. The recommendation to simplify and rationalise permits and licences is welcome, as is the proposal for Government Departments to audit existing regulations that add to the cost of doing business.”

Business groups are now urging Government to move beyond consultation and begin implementing recommendations that can provide immediate support to firms.

The report’s proposals span energy, insurance, planning, utilities, legal costs, tax administration and banking, creating what many stakeholders see as the most comprehensive review of business cost pressures undertaken in recent years.

McGibney said the priority must now be execution.

“The focus now needs to be on delivery. These recommendations should not be allowed to sit on a shelf. Government should set out clear timelines for implementation and move quickly on those measures that can reduce costs and administrative burdens for businesses.”

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