The Family Business Network has called for Capital Gains Tax to be reduced from 33% to 20% to spur investment in Irish companies.
In its Budget 2021 submission today, the organisation also said that the VAT rate for the hospitality and tourism sector to be reduced to 5%.
The network, which represents family-owned businesses across Ireland, recommended the extension of the Commercial Rates waiver until the end of 2021 and a review of the current Commercial Rates regime.
Family businesses also urged the government to update the tax system to remove the obstacles faced in family business succession planning and transition.
This includes abolishing the 90% cap to provide full relief from Capital Acquisitions Tax (CAT) under Business Relief.
John McGrane, Executive Director of the Family Business Network, said that Budget 2021 takes place in the middle of the greatest challenges facing Ireland in decades.
“Second only to saving lives, saving jobs should be the number one priority in the upcoming budget,” said Mr McGrane.
“Employing more than three times as many workers as foreign-owned firms and the State combined, family firms in every town across the country can become the most effective engines for economic growth but only if they’re enabled to be.”
He added that with ‘darker economic clouds’ looming, now is the time for Government to ‘unleash the potential of Irish family businesses’ to secure a jobs-led recovery.
“Reducing the CGT rate to 20% is a ‘win-win’ for the exchequer because it will release new investment by local employers and create new jobs,” he said.
“The last time Ireland reduced the rate of CGT, the State collected even more tax because of growth in activity.”