Call to cut capital gains tax in budget

The upcoming budget offers the Government the opportunity to deliver a range of reforms that encourage entrepreneurship and ease the burden on hard-pressed workers.

In its pre-budget submission, Cork Chamber of Commerce called on the Government to introduce a range of measures including a reduction in the marginal rate of income tax and a cut in capital gains tax (CGT) for entrepreneurs, as well as maintaining the 9% Vat rate for the hospitality sector.

A particular focus is given to helping the lot of entrepreneurs and strengthening the region’s startup ecosystem.

The Chamber advocates reducing the capital gains tax from 33% to 20% for entrepreneurial investments to incentivise investment and reward entrepreneurship.

With growing concern over the impact of the UK’s more favourable taxation system with regards to entrepreneurship, including an equivalent 10% CGT rate, the Chamber’s recommendations reflect the stance expressed by Dublin startup commissioner, Niamh Bushnell earlier this week.

The introduction of a simplified R&D tax credit system for SMEs to encourage increased investment in this area and further support innovation is also recommended.

The document also focuses on simplifying the tax code for business and reducing the rates paid by workers.

Specifically, it is suggested that income tax and the Universal Social Charge should be merged to simplify the taxation system and make it easier for employees and employers to accurately calculate their respective liabilities.

A cut in the marginal rate of tax for higher earners, both PAYE earners and self-employed workers, below the headline rate of 50% would stimulate entrepreneurship, improve international competitiveness and make Ireland an attractive location for highly skilled workers, it is claimed.

Proper access to affordable childcare services, which has positive implications for female labour market participation, is also encouraged.

The business representative body also called for investment to be funnelled into key infrastructural projects such as upgrading the N28 Bloomfield to Ringaskiddy Road; progressing the Mallow Northern Relief Road; and prioritising the development of the M20 Cork to Limerick motorway.