Deloitte publishes its pre-budget 2024 submission has been saved
Deloitte publishes its pre-budget 2024 submission
Budget 2024 should focus on certainty, growth and competitiveness in all top priority areas such as indigenous and multinational businesses, employment, climate change, real estate and tax administration.
Pre-Budget 2024 Submission
The Irish economy has rebounded strongly from all the challenges faced in the last three years. The unemployment rate of 3.8% in May 2023 was lower than the pre-pandemic level of 4.8% recorded in February 2020. Recent statistics in respect of May 2023 note that tax receipts were €33.1 billion to end-May, up €3.1 billion or over 10 per cent on an annual basis, driven by strong income tax, VAT, and corporation tax receipts. Income tax receipts amounted to €13 billion to end-May, up by 9½ per cent on last year. VAT receipts to end-May were up almost 12 per cent compared to the same period last year. Corporation tax receipts to end-May are up €1.1 billion compared to the same period last year. Ireland was the only EU country to avoid a recession during the pandemic, as the strong performance of multinationals bolstered economic activity. However, several pre-pandemic challenges remain, including housing shortages, infrastructure delivery, green investment gaps and the need to strengthen the growth and competitiveness offerings for indigenous businesses, small and medium sized enterprises (“SMEs”) and multinational enterprises (“MNEs”).
Certainty is critical to business and investors. In the past, the Irish government has used the certainty and stability of Ireland’s regime to attract inward investment. Ireland needs to maintain and further develop a reputation for certainty, minimising unexpected changes so that long term investment decisions can be made. It is crucial that in making changes to tax law, the Department of Finance consults with stakeholders. Transparency and consultation with stakeholders and the public generally is key in dealing with implementation of new laws and amending of existing law. Throughout the implementation of the BEPS measures, Ireland has sought feedback from stakeholders and issued roadmaps. This has facilitated a thorough and transparent process and led to implementation of law, which although may be subject to amendment for technical matters has a level of certainty of application. We would suggest that a feedback and consultation approach similar to that used in respect of Ireland’s implementation of EU directives should be extended to all material areas of taxation going forward. We understand that the intention is to continue to engage in consultation on various tax matters and we welcome this. Our pre Budget submission addresses priority areas such as indigenous and multinational businesses, employment, climate change, real estate and tax administration. Further insights into these areas are provided by our experts below, and we will watch developments in these spaces with interest.