Pre-Budget 2015 perspectives
On October 14 Ireland’s eighth (and last) austerity Budget since 2007 will be announced.
A well flagged ‘small cake’ is available for distribution whilst maintaining our financial discipline given the high debt burden on the State. Our team of professionals have given a lot of thought to what is required and the detail is set out in this briefing document.
In this introduction I will outline a few key takeaways.
In our view a general ‘giveaway’ is not optimum. It would be better to give a rebate that is directly linked to increased economic activity and/or a socially desirable objective. For example, incentivising consumer spending on health/ wellness and education would have a lot of positives. In addition, our analysis shows that the CGT rate is now at a level that is having an adverse impact on yield – it is time to reduce the headline rate or carve out more CGT reliefs.
The 80% windfall tax on land should be abolished. It is a barrier to residential development (a job rich sector) and in any event is not in compliance with EU law. Indeed, in general, the over-taxed entrepreneur needs to be better rewarded for the risks they take and the jobs they create.
We need to continue to enhance our tax regime to remain competitive. A focus on substance, transparency, certainty and sustainable business model optimisation is critical in this regard.