Stockbroker Davy and consultancy PwC Ireland have told the Government that significant cuts to capital gains tax (CGT) are required in Budget 2027 to encourage entrepreneurship and investment in the Republic.In a pre-budget submission, Davy recommended an immediate reduction in CGT from 33 per cent to 25 per cent and urged the Coalition to commit to reviewing “the case for further decreases post-2027”.Head of Davy’s business owners segment Kevin Doherty said its recommendations were based on consultations with Irish business owners, who said they felt a lack of support to realise the full potential of their business. “Reducing capital gains tax rates to 25 per cent, which would put Ireland broadly mid-table in a euro zone context, coupled with other targeted supports for entrepreneurs, would be a highly positive starting point,” said Doherty.A separate pre-budget submission by PWC Ireland said one of its central recommendations for the budget was a phased reduction in CGT to 20 per cent. It said the Republic’s rate was among the highest in Europe and should be reduced to 20 per cent over a three- to five-year period to encourage investment activity and support reinvestment in Irish businesses. Will a Middle East peace deal make any difference to inflation? Listen | 32:03Taoiseach Micheál Martin first signalled in February that the Government would scope out changes to CGT when he told the Business Post the 33 per cent rate was too high. “I think there is evidence we’re losing some investments or some capital when people sell their businesses,” said Martin. Davy’s pre-budget submission also suggested changes to the Entrepreneur Relief scheme, which allows business owners to avail of a reduced 10 per cent CGT rate on the sale of a business or shares up to €1.5 million. The stockbroker has advised that the lifetime limit should be raised to €3 million to promote more enterprise and called for “significant simplification” of the rules to allow access to the 10 per cent rate for external investors.Head of tax at PwC Ireland Paraic Burke said the budget was a “critical opportunity” for the Government to prioritise innovation, clean energy, housing delivery and indigenous enterprise.“As global competition intensifies and economic conditions evolve, we emphasise that certainty, simplicity and targeted investment will be key to sustaining Ireland’s competitive edge,” said Burke.PwC Ireland’s submission said the State has a track record of attracting research and development (R&D), but tax credits being applied to this activity are “increasingly misaligned” with modern R&D.The current system allows companies to claim a corporation tax credit of 35 per cent on R&D expenditure.The consultancy said since many firms now rely on outsourcing to access niche expertise for R&D, the third-party outsourcing cap for R&D credits should be increased from 15 per cent to 30 per cent.