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Capital Gains Tax a dead weight on firms

Friday, January 24 11:31:51

In the lead up to the important Capital Gains Tax (CGT)( deadline this month there have been renewed calls for the government to look at the CGT system in Ireland.

Ireland's Capital Gains Tax rate has been increased four times since 2008, and now stands at 33pc, one of the highest rates in the world. Many countries, such as Belgium and the Netherlands have no Capital Gains Tax at all in a bid to encourage investment and entrepreneurialism. Put bluntly, Ireland is not a very attractive place to sell your business right now.

Anyone who has sold part or all of their company or indeed property has until the end of the month to calculate and pay their CGT bill over to Revenue.

TaxAssist Accountants, a firm that works with thousands of small businesses across the country has noticed the impact the higher rate has had.

"The fact of the matter is that for every increase in CGT, fewer start-ups get funded. This is because investors are looking for higher returns to make up for the higher taxes they have to pay. Clearly this isn't good news for jobs," said Greg Murphy M.D of TaxAssist.

"There are however some very simple ways around this to support genuine entrepreneurship according to Murphy 'In the UK for example, they have introduced a rule that entrepreneurs will be taxed at only 10pc on gains. This promotes innovation and to my mind it is where we should be moving."