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Tuesday, 23rd April 2024
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Industry urges incentives for long term savings Back  
Pre-budgetary submissions from industry have echoed economists’ calls for measures to encourage long term savings.

Hibernian chief executive Pat McGorrian urged the Government to look at means of vigorously encouraging consumers to make greater provision for long-term savings.

McGorrian said such a provision in the budget would help to keep domestic demand in check and promote long term investment. He also pointed to the current higher level of taxation on long term savings than on capital gains. McGorrian urged the Minister for Finance to introduce a reduction in the level of taxation on long term savings to 12.5 per cent in the forthcoming budget.

Speaking at the launch of Hibernian’s new corporate image following the completion of the Norwich deal McGorrian said ‘We need to look at ways of encouraging consumers to look to the longer term by making provisions for retirement through pensions and long term savings plans. A preferential tax rate would make a significant contribution to promoting this objective while bringing wider benefits to the economy’ he said.

The EBS has also lobbied the Government on a plan for long term savings. Martin Walsh, general manager of lending at EBS said the company had submitted a detailed proposal to the Government aimed at encouraging more people to save regularly through the introduction of a tax credit that would be paid directly into savings accounts. The money would not be accessed for between 7 - 10 years. Walsh said that the scheme had been designed to be ‘institution neutral’ and believes it would be a powerful economic tool in the forthcoming budget.

Walsh said ‘We believe that this scheme, while not being too expensive has the potential to be a real incentive to every individual to start saving and thus help them to increase their own resources, while at the same time moderating aggregate demand in the economy.’

The Irish Software Association joined the queue of those making anti-inflationary budgetary suggestions with a call for a reduction in taxation on share options. The Association is calling for a reduction to 20 per cent on the tax rate on gains from stock options.

Katherine Lucy, director at the Association said ‘The Government has limited weapons in helping to ease the inflation rate but this should be an integral part of its anti-inflation drive.’

These calls echo those made by leading economists in Finance’s economist survey, which appeared in the September edition.

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