Business

PwC is campaigning for longer VAT exemptions and inheritance tax cuts

Influential accounting firm PwC is pushing for a further extension of the VAT exemption in hospitality through the end of 2024, along with an overall reduction in VAT to 21 percent.

In its pre-budget proposal, co-authored by Family Business Network (FBN), PwC is calling for a range of tax cuts, including measures to make inheritance more lucrative, which it says will help make local businesses more competitive.

PwC said lowering the tax burden on private companies would help them support their employees during inflationary pressures and make them more financially sustainable.

“First, more strategic and long-term measures to encourage investment and support entrepreneurs – making Ireland the first and only choice for entrepreneurs to set up a business,” said Nicola Quinn, PwC’s tax partner for corporate and personal operations.

“Second, many of the proposed measures to close the large gap in Ireland’s personal tax rates compared to international standards, particularly in the areas of taxation of profits and employee ownership of a company, speak in favor of closing that gap.”

The bill proposes increasing tax margins and credits, along with a reduction in employer PRSI, to protect workers against wage erosion from inflation.

But PwC and FBN also want action that feeds directly into the bottom line of Irish companies.

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The offices of Pricewaterhouse Cooper (PWC) at Spencer Docks on the North Quay of the River Liffey

The document outlines a proposal to keep VAT for hospitality businesses at the reduced rate of 9 percent, while reducing VAT for all businesses from 23 percent to 21 percent.

The special hospitality rate was launched in 2020 to help those businesses hardest hit by the pandemic lockdowns. Maintaining it would cost the treasury an estimated €500 million a year.

According to the latest May tax returns, VAT receipts are up 27 percent year-to-date as the reopening of all sectors of the economy has fueled a spending boom.

The motion also advocates relaxing the tax regime on company sales and inheritances by reducing the tax on capital gains from non-living assets from 33 percent to 20 percent.

PwC and FBN have also applied to increase the capital acquisition tax limit for inheritances from parents from EUR 335,000 to EUR 500,000. They also want an end to upfront taxes on transferring businesses to the next generation.

https://www.independent.ie/business/budget/pwc-lobbies-for-longer-vat-holiday-and-reductions-to-inheritance-taxes-41792575.html PwC is campaigning for longer VAT exemptions and inheritance tax cuts

Fry Electronics Team

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