Capital gains tax regime needs significant overhaul, Ibec says
Long-term investment needed to ease pressures in economy, lobby group says
Ibec president Edel Creely. Photograph: Alan Betson
An overhaul of the capital gains tax regime and a meaningful employee stock ownership scheme are among a suite of suggestions from business lobby group Ibec, designed to help small and medium enterprises (SMEs) as part of Budget 2019.
In advance of Wednesday’s National Economic Dialogue, Ibec has recommended that the State devise a meaningful employee stock ownership scheme to help SMEs attract and retain talent.
It also suggested that capital gains tax be “significantly overhauled” to bring it into line with the wider corporate tax regime for business investments.
Ibec’s recommendations come amid its belief that competitive pressures are emerging in the economy.
“The single biggest challenge facing Irish business now is the attraction and retention of talent, so we need to do much more around housing and long-term investments that ease capacity pressures,” said Ibec president Edel Creely.
“Brexit and competitiveness pressures will be particularly acute for indigenous business, so we are calling for a series of targeted measures in Budget 2019 to help achieve more balanced economic growth,” she said.
Among those targeted measures are a scheme to encourage SMEs to invest in robotics and automation to drive productivity growth.
The lobby group also wants a “radical fiscal response” to address the “crisis in higher education funding”.
“We have the third highest capital gains tax rate in the OECD, a stamp duty regime on shares which is the highest in the world and a research and development tax credit which is far too complicated for smaller firms to engage with,” Ms Creely said.
Ibec will launch its full submission for Budget 2019 in July, further expanding on its recommendations.