To alleviate the accommodation crisis in the country, KPMG suggests the Government needs to offer incentives to corporations for staff lodging development in the 2025 Budget. Moreover, the ‘Big Four’ firm recommends a benefit-in-kind (BIK) exemption for employees earning under €50,000 in order to make such housing alternatives appealing for staff.
The company warns that the current housing crunch poses a threat to the appeal of the state for investing and may discourage many employees, particularly young Irish professionals, from remaining in the country. KPMG states that these measures could boost housing supply while simultaneously offering a vital BIK exemption for employees in the lower earning bracket.
Ryanair, the budget airline, announced earlier in the year their acquisition of 25 newly-built homes in Swords, north Dublin, to accommodate recently hired cabin crew, openly criticising the shortage of affordable housing in Ireland as a hindrance to further recruitment. Some hotels, like the Merrion Hotel in Dublin and Powerscourt Hotel in Co Wicklow, have also taken initiatives to provide and even build exclusive accommodation for their employees to safeguard their operations.
Chambers of Ireland had previously mentioned to an Oireachtas committee last summer that multinationals were contemplating buying whole housing developments for their workforces. On the other hand, KPMG also proposes the establishment of an office dedicated to simplifying tax matters to tackle the burgeoning complexity of the tax system, which they claim is driving up business costs and harming competitiveness.
According to Tom Woods, KPMG’s Chief Tax Officer in Ireland, the 2025 Budget should prioritize addressing significant competitiveness issues confronting the Irish economy, including employment costs, international competition for skilled workers, affordable housing, the necessity to foster more global Irish businesses, and climate change commitments.
At the close of last year, a 15% tax rate was implemented for companies garnering annual revenues in excess of €750 million. This minimum rate, achieved in 2021 through an international agreement led by the Organisation for Economic Co-operation and Development (OECD), has rendered the 12.5% corporate tax rate less competitively advantageous for the Republic.
Nations all over the world are adopting this regulation, thus it’s “imperative that Ireland stands apart from its rivals by boosting what it offers to companies and individuals,” Mr Woods suggests.
The most recent pre-budget seminar, the National Economic Dialogue, was held in Dublin on Monday, hosted by the Government. Minister for Finance, Michael McGrath hinted that the budget will include provisions to assist households, in addition to a package focused on social welfare.