Business Post: Micheál Martin to slash ‘too high’ capital gains tax to spark investing boom

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yellowmoose

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Business Post [Paywall]

Capital gains tax should be slashed to encourage more Irish people to invest, Taoiseach Micheál Martin has said.

“Capital gains is too high in Ireland, if I'm honest,” Martin said in an exclusive interview with the Business Post.

“We're not going to go through the budget here, but I think 33 per cent is high, and I think there is evidence we're losing some investments or some capital when people sell their businesses.
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That would be great. It was 20% until 14 Oct 2008.

Historical info from revenue.

How to calculate CGT

This page explains how Capital Gains Tax is calculated
www.revenue.ie www.revenue.ie

7 December 2011 – 5 December 201230%
8 April 2009 – 6 December 201125%
15 October 2008 – 7 April 200922%
Up to, and including, 14 October 200820%

Hopefully, they move exit tax by at least the same amount. Otherwise, the ETFs vs direct shares tax difference gets even worse.
 
I wonder what has caused the sudden focus on reform of savings and investment taxes and that Ireland has too high taxes. They sat on the fence on this for years whereas suddenly its a political priority which even Michael Martin has jumped on. Maybe its EU focusing on it and Ireland hosting EU presidency from June?
 
Cutting CGT in particular seems to have come out of nowhere, it isn't discussed much compared to other investment taxation issues. Was it an off the cuff remark? There is no particular indication that it is "too high" from MoF's answer to PQs here:

The Programme for Government commits to maintaining a broad tax base to guard against the need for counter-cyclical fiscal policy in the event of a downturn and to prepare for future budgetary challenges relating to population aging. Capital Gains Tax (CGT) is part of a system to ensure taxation is not focused solely on income tax and that those who benefit from gains in the value of their assets are included within the tax net on an equitable basis. As with all taxes, CGT is subject to ongoing review, which involves the consideration and assessment of the rate of CGT and the relevant reliefs and exemptions from CGT as part of the annual Budget and Finance Bill process, and this is considered in the wider tax policy context.
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taxfoundation.org

Capital Gains Tax Rates in Europe, 2025

Capital gains taxes create a bias against saving, leading to a lower level of national income by encouraging present consumption over investment.
taxfoundation.org taxfoundation.org

1000022272.webp
 
Premos said:
I wondered if that remark was to encourage them to wait and see instead of selling now as I was surprised to see that reported last night.
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Rather like we were encouraged to wait and see with the RPZs. That carrott was dangled in front of us for years and look what happened.

This might be the same thing alright.
 
Greenbook said:
Yes, odd alright. The high CGT was brought in due to the Recession and the low tax take then. That's long gone, so you are right, why the sudden interest in this now?
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Because it brought in quite a bit of income. Its still going to be painted as "giving money back to the rich bla bla bla"
 
I suspect the change in MoF has been a significant factor here - 10 years of no action on reform to the taxation system despite plenty of scope with record tax revenue....
 
Alot of those high tax rates in Europe are not what they seem, for example Denmark only imposes 42% on amounts above 50K Danish kroner, upto 50K it is 27% , that is fairly generous, effectively most people will only be paying 27%. They also have a tax advantaged investment accounts where you pay 17% tax on gains each year (whether realised or not) . Even though Denmark generally is a high tax country its way better for investors than the current Irish regime.
Given that Ireland is highly exposed to the US and UK markets and that we benefit so much from FDI, it is very strange that we should be imposing punitive investment taxes way out of line with our contemporaries. It is very welcome that this anomaly is finally being addressed.
 
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