The Irish Tax Institute has said that Budget 2027 presents the Government with an opportunity to address areas where tax policy may be working against its own objectives.
The Institute has published its Pre-Budget Submission, in which it has urged Government to focus on key areas such as competitiveness and safeguards for taxpayers.
The Institute has highlighted key areas where existing and proposed tax policy could produce outcomes at odds with wider Government goals.
It warns that Enhanced Reporting Requirements (ERR), introduced in January 2024, are causing small businesses and restaurants to scale back modest staff gestures such as retirement lunches and gifts for special occasions due to concerns around compliance obligations. This, according to the Institute, is directly undermining the Government's hospitality supports introduced in Budget 2026.
The Institute has also cautioned that proposals in the joint consultation by the Department of Finance and Revenue on eWithholding Tax (eWHT) would create cashflow issues for subcontractors inevitably resulting in increased costs on housing and infrastructure projects. It says this approach runs counter to the Government's National Development Plan and the stated need to accelerate the delivery of housing.
It adds that proposed changes to the Tax Appeals Commission (TAC) would, if enacted, remove taxpayers' automatic entitlement to private hearings, making the appeals process less accessible, despite the fact the TAC was established with the aim of providing an efficient, accessible and effective alternative to the Courts for tax appeals.
The Institute has also called for Ireland's personal marginal tax rate to be reduced to 50%, noting that the current rate of 52.2% is hampering Ireland's ability to attract and retain international workers.
It has also called for a reduction in Ireland's Capital Gains Tax rate from 33% to 25% for active business assets, pointing out that Ireland's CGT rate remains one of the highest in Europe, restricting investment and discouraging business owners from scaling firms.
Speaking on publication of the submission, Shane Wallace, President of the Irish Tax Institute, said: “Ireland enters Budget 2027 from a position of economic strength, but that strength cannot be taken for granted. There are areas where tax policy is working against its own intent and examples of where current proposals will do likewise. Budget 2027 is an opportunity to fix that.
“Taxation remains one of the most effective policy levers available to Government. By strengthening competitiveness, supporting innovation, simplifying administration and protecting taxpayers, Ireland can reinforce its position as a leading location for business and talent. These are the levers within the Government's grasp, and they are ones that our European peers are already pulling.”
Read the full Pre-Budget 2027 submission.
