Dublin Chamber Calls for Return to Work Tax Credit in 2023

Dublin Chamber’s recommendations

Today business group Dublin Chamber submitted its recommendations for Ireland’s Budget 2023.

Dublin Chamber believes the focus of Budget 2023 should be on investment in urban infrastructure and housing. Rather than increases in current spending, recent corporation tax “windfall gains” should be dedicated to a “rainy day” fund specifically earmarked to maintain medium/long term capital investment plans for cities, which provide the greatest return on investment.

The Chamber’s four priority recommendations are:

1. Help more women back into the workforce through a Return to Work tax credit;

2. Provide investors in Irish SMEs a 20% Capital Gains Tax (CGT) rate;

3. Increase the tax of vacant land and properties; and

4. Ringfence planned increases in carbon tax for sustainability measures.

Return to Work Credit

Speaking as Dublin Chamber’s pre-budget submission was launched, Dublin Chamber Public Affairs Director, Aebhric McGibney said: “Government needs to boost the supply of local talent by helping more people return to the labour market. A Return to Work credit would overcome the disincentive faced by many couples where one person is working – if the second person returns to a full-time job, they lose a lot of tax breaks and have to earn a lot of money before they break even.”

“Firms will need to raise a significant amount of capital to deal with supply chain issues and to ride out the oncoming global economic downturn. Yet buying shares in local firms is currently treated the same, for capital tax purposes, as investing in a blue chip quoted stock,” continued McGibney, “We’d like to see a lower rate of CGT for people who want to back local firms by investing in them.”

Ireland-UK Tax Comparison 2022

Housing

Low levels of housing and apartment construction over many years in Dublin have not kept pace with the growth in population. The accommodation shortage together with remote working trends is driving employment abroad. Aebhric Mc Gibney commented: “Housing is our top priority. We need to see Government build more and penalise vacant sites where they are not being developed for housing.  We, therefore, propose an increase in the Zoned Land Tax and the introduction of a Vacant Property Tax.”

Climate

Dublin Chamber also advised Government to maintain the increase in carbon tax as planned in Budget 2022 to help meet the targets outlined by the Climate Action Plan 2021.

Aebhric McGibney said: “The energy crisis has highlighted the importance of switching to indigenous, renewable energy systems and investing in the electricity grid to ensure that it is future-proofed and has the capacity to meet decarbonisation targets.”