The policy recommendations are contained in Deloitte Ireland’s ‘Scaling Smarter’ Pre-Budget 2026 Submission, which has been submitted to the Department of Finance.

The submission says that reducing CGT would remove distortions that discourage both domestic entrepreneurship and an influx of foreign capital.

It also urges the Government to introduce strategic tax reliefs and incentives to increase the supply of the right type of housing in the areas that need it most.

Domestic Direct Investment

The submission warns that the country faces significant challenges and that bold strategies are required to maintain competitiveness, attract investment and to support and stimulate significant domestic growth.

It says the country’s tax policy should ensure future growth by accelerating Domestic Direct Investment (DDI). This should include a reduction to the headline CGT rate and tapered CGT relief to encourage entrepreneurs to scale their businesses in Ireland.

Deloitte says the headline CGT rate of 33% should be reduced to 20% to enhance Ireland’s enterprise environment, support small businesses, facilitate inter-generational succession and strengthen the taxation framework to improve competitiveness and business continuity. It says a reduced CGT rate would align Ireland with EU norms and remove distortions that discourage entrepreneurship.

Housing

The pre-budget submission warns that the ongoing housing supply crisis is weakening Ireland’s competitive edge and limiting its ability to attract key skills to the country in crucial sectors such as technology and financial services. To address this, Deloitte urges the Government to introduce both incentives and reliefs for developers to provide the necessary housing supply.

The submission says that such measures should be targeted to specific needs and locations such as the provisions of student accommodation near universities and colleges, senior-co-living developments, urban apartments, and the remediation of brownfield sites. It also says any such initiatives must be transparent, regularly monitored and time-bound.  

Decarbonisation & Digitalisation

The submission warns that as many global markets increasingly prioritise environmental responsibility, Ireland risks falling behind in offering businesses the necessary incentives to decarbonise their operations.

It urges the Government to introduce a decarbonisation tax credit to reward companies that invest in emissions-reducing technologies and practices. It says this ‘carrot’ approach can complement the ‘stick’ of carbon pricing and accelerate voluntary action.

A similar tax credit for businesses investing in AI and digitalisation is also proposed by Deloitte. This would apply to expenditure related to the reliably safe development, implementation and use of AI and digitalisation. 

Daryl Hanberry, Head of Tax & Legal at Deloitte, said:

“Ireland faces significant challenges, such as changes to the international tax system, increased competition for Foreign Direct Investment, and barriers to domestic growth. The country is in a strong financial position, and we have choices, but we need to act urgently. It is time for a step change and Budget 2026 is one of those rare moments where the Government can make a significant statement that will create an impact well into the future.”

“Our pre-budget submission outlines the bold strategies and measures the country should adopt now to accelerate domestic growth or Domestic Direct Investment (DDI), while also maintaining our competitiveness to continue to attract FDI. The submission details specific ways to incentivise and support key areas such as entrepreneurship, decarbonisation, digitalisation and the adoption of Artificial Intelligence (AI), R&D and innovation. We also urge the Government to introduce new incentives and reliefs to increase housing volumes as the lack of supply is potentially the single biggest obstacle to economic growth.”

To read the full pre-budget submission click here