Family businesses have said that the tax system is unfairly stacked against them in a collective submission to the Commission on Taxation and Welfare.

Family Business Network, an organisation representing family-owned businesses, has called for "Ireland’s punitive and anti-competitive indigenous tax system to be reformed".

The network has warned that Ireland currently has the third-highest rate of Capital Gains Tax in the OECD, one of the lowest entry points for the marginal rate of income tax and one of the highest VAT rates in the world.

The organisation wants a cut in the standard rate of Capital Gains Tax from 33% to 20%, claiming that reducing the current rate would increase investment in the indigenous jobs sector and increase Exchequer returns.

John McGrane, executive director, said: "As the largest employer in the state, family businesses want to help develop a taxation system that incentivises not only the sustainability but also the growth of indigenous firms. We believe that the Commission on Taxation and Welfare provides the opportunity to do just that.

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"It’s vital that the Commission tackles the punitive cost of doing business in Ireland with the tax system unfairly stacked against family businesses. From the heavy tax burden placed on family business succession to an uncompetitive income tax regime, family-owned firms in communities across Ireland are restricted in their ability to compete internationally."

The Family Business Network is urging consideration to be given to temporarily reducing the Capital Acquisition Tax rate to 20% for two years and increasing the lifetime limit for Entrepreneurial Relief to €5m.

McGrane added: "That’s why family businesses are calling for a constructive revamp of Ireland’s tax system. In developing a tax regime that encourages rather than restricts the indigenous economy, we can ensure that family-owned firms in every community across Ireland can employ, innovate and invest more. 

"With uncertainties in the foreign-owned sector of the economy, if the government successfully creates a proactive environment that is conducive to the indigenous jobs sector, then family businesses will more than make up for any potential loss of FDI activity in Ireland."

Family Business Network Ireland estimates that family-run businesses contribute 80% of Ireland’s economic value and employs nearly a million people – more than the state and foreign businesses combined.