KPMG calls for establishment of 'Office for Tax Simplification' in Ireland
Woods, Kpmg Ireland Tax At Head Tom In Of
KPMG has called for the Government to establish an Office for Tax Simplification to address the "excessive complexity" of the Irish tax system in recent years.
In its Pre Budget 2025 submission, the professional services firm said tax difficulties were adding to the cost of doing business and undermining competitiveness, particularly now than Ireland's 12.5% corporation tax is less of an advantage.
Speaking in its submission, Tom Woods, Head of Tax at KPMG said: "Budget 2025 needs to focus on the key competitiveness challenges facing the Irish economy, including the cost of employment, the international competition for talent, affordable housing, the need to develop more Irish businesses of international scale and climate change commitments."
Mr Woods added that as the rate of corporation tax increases to the global minimum of 15%, it is critical that Ireland "differentiates itself from its competitors by enhancing its value offerings to businesses and individuals."
"There is also a greater imperative to fast-track the upscaling of domestic businesses to sustain future tax yields," Mr Woods added.
As part of its submission to government ahead of this year's Budget in October, KPMG is also calling for a reduction in the cost of employment by increasing the entry point to the marginal income tax rate and cap the amount of income subject to PRSI.
"Unnecessary complexities in the Irish code must be tackled in Budget 2025 to protect Ireland’s standing as a location for international investment," the professional services firm said.
Alongside this measure, it is also urging for incentives for the development and use of employee accommodation and to allow a corresponding benefit-in-kind exemption where employees earn less than €50,000.
To stimulate further investment in SMEs, KMPG said individuals should be encouraged to put a portion of savings into helping smaller businesses finance growth create new employment opportunities.
The accountancy giant is also calling for the re-introduction of Section 23 relief which it said would encourage the conversion of properties about retail units to residential use and encourage individuals to finance the development of new residential units for letting.
In addition, it said that the rent credit should be extended beyond 2025 and the taxation of landlords should be reformed to allow them to access the same tax rates, expense deductions, and capital tax reliefs available to trading businesses to stem the exit of so many due to high taxes on rental incomes.
KPMG has also urged the Government to abandon the cap of retirement relief, asking for further detailed consideration and analysis of the measure.