Azets Ireland has called for capital gains tax to be reduced from 33% to 20% in its pre-Budget submission.

The professional services firm, which specialises in supporting mid-market, owner-managed businesses, wants to ensure the indigenous SMEs become "true drivers of economic growth" with its proposals.

Azets said the current rate of CGT is among the highest in Europe, and that lowering it could encourage investment in local businesses and support succession planning.

"Cutting capital gains tax to 20% would give a real break to the entrepreneurs who are innovating every day, while also sending a strong message that the government is standing behind owner-managed businesses that keep the lights on and support local jobs day in and day out," said Neil Hughes, chief executive of Azets Ireland.

It has also backed calls for the permanent restoration of the 9% VAT rate for hospitality businesses from January 1 to provide relief for pubs, restaurants and hotels grappling with rising operating costs.

"An increasing number of small and family-owned businesses in the sector will close their doors if the new rate does not apply from the beginning of the new year," Hughes added.

The submission also includes a proposal to create a new state agency, Elevate Ireland, to support the growth of scaling indigenous businesses.

"Together with other measures, this agency would empower domestic enterprises to grow and compete at a global level and provide an opportunity to begin rebalancing Ireland’s economic model," Azets said.

The company has also urged the introduction of a 30% tax credit for mid-sized businesses investing in AI and digitsation, and for €200m from the National Training Fund to be ring-fenced for AI skilling and training leaders at mid-sized, family-owned businesses.

Regarding the introduction of pension auto-enrolment, wage growth and other employment changes, Azets has recommended deferring planned increases in employee statutory sick leave and additional entitlements to 2027 to minimise the cumulative cost increases on businesses.

It also wants government to consider establishing a €500m SME export resilience fund to support mid-sized businesses in affected sectors develop strategies to mitigate the impact of trade tariffs and diversify into new markets.

Trade tariffs are one of the top concerns facing mid-sized businesses, according to recent findings from the Azets Barometer.

Finally, the firm has called for the creation of a Rural Employment Grant to encourage employees located in the Greater Dublin Area to take up a job offer with mid-sized businesses in rural Ireland.

"There is a tangible sense that the economy is tightening, and it is becoming a more challenging market for medium-sized businesses," said Hughes.

"SMEs in sectors such as retail, hospitality, and family-owned businesses are feeling this impact most acutely, grappling with higher operating costs, economic shocks, and difficulties attracting skilled talent.

“Our Pre-Budget Submission sets out measures that can ease the cost and regulatory burden on mid-sized businesses while helping them to remain engines of growth in their communities."

Photo: Neil Hughes, CEO of Azets Ireland. (Pic: Supplied)