Dublin Chamber launched its submission on Budget 2022 this week, calling on Government to double public investment in the construction of new homes next year, and to introduce a new lower tax rate on investments in Irish SMEs to boost business growth. Based on business feedback in recent months, the Chamber identified four strategic priorities: adapt and extend business supports, deliver a strategy to renew Dublin and Ireland cities, reward Irish enterprise, and to support green and digital transformation.
While it outlines a wide range of proposed measures under these headings, the Chamber’s priority recommendations in this year’s submission are:
- Double public capital investment in housing, targeted in urban areas to deliver appropriate accommodation and ease pressure on the private market.
- Introduce a 20% Capital Gains Tax rate on disposals of investments in SMEs to boost investment in Irish enterprise.
- Introduce a ‘Going Green’ Tax Credit to encourage adoption of sustainable business practices, accelerating the carbon tax timeline if need so requires.
- Continue a gradual withdrawal of the EWSS and other supports for SMEs with a schedule of reductions to allow for financial planning.
Speaking as Dublin Chamber’s pre-budget submission was launched, Dublin Chamber CEO Mary Rose Burke said: “Housing is now the top concern for 71% of businesses in Dublin. The availability and affordability of housing remains the most immediate threat to cost competitiveness in the Greater Dublin Area. This also poses a challenge to maintaining our FDI competitiveness in the future. We are calling on the Government to double public capital investment in housing, targeted in urban areas to deliver accommodation at appropriate densities and ease pressure on the private market.”
“To tackle the housing crisis, the State needs to play a central role rather than a merely supplementary one. Social housing policy needs to shift definitively from reliance on acquisition and rental support to the construction of purpose-built affordable homes on a large scale. The Government should take advantage of the positive borrowing environment and double investment in housing to €4 billion in 2022.” Mary Rose Burke said.
The Chamber’s intervention on housing follows similar advice from the ESRI earlier this summer, and recent Dublin Chamber survey results showing that housing, infrastructure, and traffic congestion rank as the top three concerns for Dublin businesses other than Covid-19.
Lower Tax Rate Recommended for SME Investments
Dublin Chamber has also advised the Government to introduce a new 20% rate of Capital Gains Tax (CGT) on investments in small and medium enterprises. It said that growing Ireland’s indigenous business base will require greater investment in SMEs, but that our present tax regime incentivises investment in larger corporations which are considered a safer bet.
Mary Rose Burke said: “Ireland’s CGT rate is the third-highest in Europe at 33%. It makes no distinction between high-risk investment in an Irish start-up and passive investment in a ‘blue chip’ firm. Effectively, there is a disincentive when it comes to investing in a less established company. We need to reverse this dynamic. If we want to grow our indigenous enterprise base, we need to reward those who take a risk on a new Irish business."
Dublin Chamber's pre-budget submission also calls for the introduction of a 'Going Green' tax credit, modelled on the R&D tax credit, to encourage the adoption of sustainable business practices. Suggested qualifying practices include retrofit and energy efficiency measures; waste management practices; circular economy measures; and the adoption of low-emissions transport.
Read the submission in full here.