Friday 30th April 2021
Rate of Capital Gains Tax must be reconsidered, says McDowell
Independent Senator Michael McDowell addressed An Tánaiste Leo Varadkar this morning as the Seanad discussed the impact of covid-19 on business and the economy in Ireland.
As the various sectors of the economy begin to reopen in line with the government’s roadmap for the coming months, Senator McDowell proposed a fiscal measure to kick-start the economy:
“There is a real need now to reconsider the rate of capital gains tax for the next two years.”
In asking the Tánaiste to take the recommendation to Minister for Finance, Paschal Donohoe, Senator McDowell drew the attention of the House to the past success of such a move, pointing out that in 1997 a reduction from 40% to 20% in Capital gains Tax had boosted the revenue yield by 500%.
A reduction in the CGT from its current rate of 33% to 20%, as proposed by the Senator, would not only bring in greatly needed exchequer receipts to help offset the major current deficit, but would also free up assets and land availability, making the “sale and transfer of assets more practical for those people who are trying to recover the economy.”
Such a cut would have to be made by government in Budget 2022, with Senator McDowell believing that such the decision to cut CGT to 20% for at least 2 years would provide a valuable boost to our economic recovery after the pandemic crisis.