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Roundup: Ireland introduces counter measures to reduce Brexit impact

Xinhua, October 12, 2016 Adjust font size:

The Irish government said on Tuesday it has introduced a number of specific measures to help firms that might be affected by the uncertainty caused by Britain's vote to leave the European Union (EU).

The measures include an extension of the Special Assignee Relief Program, which gives designated individuals income tax relief for work done in the country until the end of 2020.

The Foreign Earnings Deduction, which gives relief for work "significant amounts" of work done in certain foreign countries, has also been changed to reduce the minimum number of days required to be spent abroad.

The reduced VAT rate for the tourism and hospitality industry will be maintained in order to provide a "buffer" against the weakness in sterling, while the Start Your Own Business scheme would be extended for a further two years.

Meanwhile, a number of measures will also be introduced for the agri-foods sector, including the ability for struggling farmers to "step out" of income averaging and pay only the tax due that year.

During his speech in parliament, Irish Finance Minister Michael Noonan said the Brexit vote prompted his department to reduce its GDP forecast to 3.5 percent for 2017.

He said it was not possible to predict its exact impact on the Irish economy until a final settlement was agreed.

"Whatever the final settlement, what we know with certainty is that Brexit has increased risk to the Irish economy and, as well as introducing specific measures to assist particular sectors of the economy, we must also put in place safety nets to protect us against future economic shocks," he said.

Noonan said it was clear that Brexit represented a "real risk" to the economy given the close links and high level of trade between Ireland and Britain.

"Over 1.2 billion euros (about 1.34 billion U.S. dollars) of goods and services are exchanged between us on a weekly basis," he said.

"This trade supports 400,000 jobs, split evenly between the two islands, with many more jobs in the supply chain," he added.

The Irish minister said tourism, food and agricultural businesses will be most directly hit by Brexit.

He said the best outcome for Ireland would be for Britain to stay closely linked to the EU, with no "hard border" being introduced with Northern Ireland.

He also said the Irish government hopes to maintain the Common Travel Area, as well as the preservation of a common labor market between the two countries.

Meanwhile, Paschal Donohoe, minister for public expenditure and reform, said the Irish government will support industry to both meet the challenges and to take advantage of any opportunities that may arise.

In a speech to parliament, Donohoe said a number of government departments and agencies will be given more money to deal with the threat of Brexit, not least the Department of Agriculture, Food and the Marine which is getting an extra 119 million euros.

On Tuesday, the Irish government unveiled its pro-growth 2017 budget, which will see a range of tax cuts and spending increases worth a total of 1.3 billion euros. (1 euro = 1.11 U.S. dollars) Endit