PwC has said the current tax regime can be "reset" to help alleviate the housing crisis.

In a pre-budget analysis, the firm also called for "more support for Ireland’s private businesses enabling them to diversify, scale-up and compete on the world stage".

And they want to see "targeted tax measures to enhance Ireland's position as a global financial services hub" as well as to "diversify tax policy to attract new foreign direct investment, particularly AI".

In a lengthy submission, they have called for "urgent efforts to reduce the complexity of Ireland’s tax regime" as well as accelerating tax incentives to support Ireland’s energy transition. 

Paraic Burke, Tax Leader, PwC Ireland, said: “In a world of increasing global instability, rising uncertainty and heightened international tax competition, the need to bolster Ireland’s competitive offering has never been more apparent. 

"With increasing geopolitical risks and uncertainties, Ireland must take action to control our own controllables".

He added: "Following endorsement from the EU to utilise targeted tax incentives, the Irish government should not be afraid to use them.

"Budget 2026 offers Ireland an opportunity to make changes that can help to direct the future course of our country.” 

On housing, PwC say the "most pressing" issue is to reform the Residential Zoned Land Tax (RZLT) as there are several issues with its implementation.

In addition, the Real Estate Investment Trusts (REITs) regime "does not currently meet its objectives, and as a result only one in four REITs launched are still in operation today," says PwC.

It says REITs need to be able to attract the foreign and domestic capital required to meet Ireland’s housing demands. 

PwC also advocates various measures for Stamp Duty, including extending the Residential Rebate Scheme and legislative measures to make it fit for purpose. 

"A temporary VAT reduction on new, affordable homes would help improve viability and affordability for first-time buyers,' the firm said in a statement.

"To promote sustainability, a reduction in Capital Gains Tax (CGT) for retrofitted properties is recommended."

More support for "private businesses" is also included in the submission.

In particular, they have called for "a reduction in the 33% Capital Gains Tax (CGT), one of the highest in Europe, to 20% to promote the transfer of businesses to the Irish business leaders of tomorrow."

"Treating the exit of a shareholder from a business as a CGT event rather than being subject to income tax (and higher tax) would be an important step towards achieving this," said PwC

The submission also calls for increases in the Capital Acquisition Tax (CAT) lifetime thresholds, which they say remain out of kilter with inflation.  

It also recommends increases to the CAT small gift exemption and CGT annual exemption.

The small benefit exemption should, say PwC, be increased to €2,500 and the restriction to five benefits should be removed to encourage employers to reward employees throughout the year. 

It should be easier for employers to provide accommodation for staff

At present, where a business rents property to its employees, the company is subject to corporation tax of 25% and a potential close company surcharge. 

This is in addition to the potential benefit-in-kind (BIK) liabilities for the employees where rent is at less than market rates.  

PwC also believes Ireland can become a global hub for the development of AI.

It notes: " While the technology and pharmaceutical industries continue to play a significant role in Ireland’s economy, we should seek to attract new industries, most notably, one of the fastest growing industries - artificial intelligence (AI), enabling an AI centre of excellence in Ireland.

"PwC recommends a 100% rate of capital allowances in the initial year of investment. 

"AI companies require highly skilled people and PwC recommends the Special Assignee Relief Programme to be extended to 2030 at least and that the relief be made more attractive i.e. by either increasing the rate (currently at 30%) at which employees can get relief or decreasing the lower limit of income that remains unrelieved (currently at €100,000)." 

And it is seeking an increase in the R&D tax credit from 30% to 35% to help keep Ireland at the forefront of locations in attracting R&D investment. 

The firm has called for a streamlining of the tax regime, noting the Corporation Tax Return has grown to 62 pages at the end of 2024 from just 22 pages in 2010.

Mr Burke added: “The global environment is facing significant upheaval following the new US Administration’s rejection of the OECD Global Tax Deal. 

"The US stance threatens the viability of the entire regime, with the possibility of retaliatory tariffs or withholding taxes that could further strain global trade and economic growth.

"Amid these uncertainties, remaining nimble and engaged at the OECD and EU level with respect to Pillar Two are crucial to maintaining Ireland's competitiveness. 

"PwC encourages Government to engage at both OECD and EU level with respect to any Pillar Two discussions and to react quickly to introduce any proposed changes to ensure Ireland is not competitively disadvantaged if it comes to any Pillar Two changes.”