Family businesses call for Capital Gains Tax cut in Budget 2020 to help save jobs

by Gazette Reporter

The organisation representing Irish family owned businesses throughout the country launched its Budget 2021 submission at its National Conference being held online today. The Family Business Network called for a reduction in Capital Gains Tax (CGT) from 33% to 20% to spur investment in indigenous companies who contribute 80% of Ireland’s economic value.

In its Budget submission to the Department of Finance, the Family Business Network also recommended the extension of the Commercial Rates waiver until the end of 2021 and a review of the current Commercial Rates regime to take account of the unique challenges facing the retail sector. The Network also says an immediate reduction in the VAT rate for the hospitality and tourism sector to 5% is now urgently required to help support the sector through the difficult winter months. 

Family businesses also urged 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. 

Launching the submission at its National Conference today, John McGrane, Executive Director of the Family Business Network, said: “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. 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.

“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. The last time Ireland reduced the rate of CGT, the State collected even more tax because of growth in activity.

“Government must also plan for the future. That’s why family-run businesses believe the National Economic Plan being unveiled with Budget 2021 should commit to establishing a National Recovery Forum to bring together employers, employees and Government, and collectively agree the best course for our economy over the next decade.”

The Network’s final online seminar as part of its National Conference series featured an interview with  the Minister of Social Protection, Community and Rural Development and the Islands, Heather Humphreys TD, and a panel discussion including former Secretary General at the Department of Finance and Chair of SME Recovery Ireland, John A. Moran which focused on the relationship between family businesses and the State.

Full details of the Family Business Network Budget 2021 Submission can be found at: https://www.fbnireland.ie/wp-content/uploads/2020/09/FBN-2021-Pre-Budget-Submission.pdf.

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