PWC's pre-Budget submission: Leveraging tax policies for sustainable business growth - Kilkenny Live

Recently, PwC launched its 2025 Pre-Budget Submission setting out a number of key tax policy proposals for sustainable business growth.

Budget 2025 represents a critical opportunity for the Irish Government to support businesses and individuals in the face of global uncertainty and in the pursuit of sustainable growth opportunities into the future.

Regional economies across the South-East are growing but, as we emerge from a Covid impacted economy, and the local labour market locally continues to strengthen, it will be crucial that the government recognises the importance of regional business and provides further support.

Our 2025 Pre-Budget Submission calls for support in the following key areas:

Seriously tackle Ireland’s housing crisis
PwC’s 2025 Pre-Budget Submission states that Ireland’s acute housing shortage is the most imminent issue facing both businesses and employees and now extends well beyond the confines of our capital. It is the single largest impediment to attracting and retaining talent and if left unchecked it will greatly impact workplace productivity.

Locally, it has led to inflated rental prices across the South East and a huge supply and demand issue which cannot be sustained.

Measures for consideration include: extension of the ‘help to buy’ scheme; policies to encourage modern methods of construction; a temporary reduction in the VAT rate for construction materials, amongst others.

Simplify Ireland’s tax legislation
PwC’s submission stresses the urgent need for tax simplification of the legislation to make us more competitive and facilitate the ease of doing business. Urgent ‘decluttering’ of tax rules is needed. Areas where simplification is urgently needed include our interest deductibility rules and simplifying reliefs such as the R&D tax credit and Employment Investment Incentive Scheme (EIIS) to make them more accessible to SMEs.

Additionally, the expansion of real-time reporting to bring non-taxable benefits and expenses into scope (Enhanced Reporting Requirements) has created a significant compliance burden on employers, and one that is completely disproportionate to the value of the related benefits.

Pro-growth measures and business support
Although consistently an area of focus, even more measures are needed to stimulate growth and incentivise investment into private businesses. This is of particular importance in our regional areas as we are heavily reliant on such businesses.

PwC’s recent EMEA Private Business Attractiveness Index ranked Ireland in 9th position out of 33 major EMEA countries. PwC’s 2025 Pre-Budget Submission highlights the importance of the domestic private business sector and the need to support employers with the cost of employment at a time when cost increases threaten job creation.

PwC’s submission calls for tax incentives to help private businesses incentivise, retain and attract key talent, such as further share scheme mechanisms and simplifying the KEEP scheme.

The submission calls for tax measures to assist private businesses in securing investment and raising funds, such as allowing interest earned on loans by angel investors to be taxed at 12.5% (instead of 25%). It also proposes increasing the lifetime limit for the Revised Entrepreneur Relief to €5m (from €1m) and removing cash as a non-qualifying asset for Capital Acquisitions Tax Business Relief purposes.

Increase attractiveness of offerings
As well as supporting local private businesses, PwC’s Submission states that there must also be a clear strategy for enhancing Ireland’s reputation as an attractive location for foreign direct investment. While welcoming the introduction of an exemption on foreign dividends, PwC calls for a broadening of the exemption to all dividends and foreign branch profits.

The submission also calls for the important need to align the Irish corporate tax system with the Pillar Two tax rules so as to avoid any distortions that may arise from these rules.

PwC’s submission states that tax policy is a crucial tool available to the Irish Government to support the country’s financial services sector, improving Ireland’s competitiveness as a location for innovation and international business.
The submission proposes tax measures to enhance Ireland’s position as a hub for sustainable finance, such as introducing tax incentives for Irish funds that prioritise investments with significant positive environmental impacts.

It also calls for tax measures to increase private investment in the retail market, such as reviewing the taxation of Exchange Traded Funds.

Further incentivise the green economy
Finally, recognising the urgency to achieve climate neutrality by 2050, PwC’s Submission proposes various tax incentives for businesses and households, including green clean technologies, renewable energy activities, offshore wind, green industrial parks and port infrastructure.

It also suggests tax measures to encourage households and communities to make changes in their energy consumption and behaviours, engaging in home retrofitting and using more sustainable transport methods.

Despite strong tax receipts, some of which are uncertain in the years ahead, investing for the future is vital.
Encouraging growth in a sustainable manner is key to creating secure employment and meeting our climate objectives.
Tax policies, if wisely chosen, could be critical to delivering success in addressing our housing and climate challenges.