WEALTH June 22, 2026 0 Comments

Unlocking the Future: PwC’s Bold Budget 2027 Playbook to Ignite Innovation and Skyrocket Indigenous Growth — Are You Ready to Cash In?

It’s a bit like Ireland’s economic engine is revving up with gusto — strong fiscal health, high employment rates, and an economy outpacing many of its counterparts. Yet, beneath this promising hood, PwC is waving a caution flag about mounting capacity constraints in housing, infrastructure, and employment that could throw a wrench in the works. Could the country’s growth stall if these bottlenecks aren’t tackled head-on in Budget 2027? Padraic Burke and his team at PwC are sounding the alarmbells, calling for laser-focused, practical interventions targeting everything from innovation and renewable energy to modern construction and private enterprise. This isn’t just any budget — it’s a pivotal moment coinciding with Ireland’s 2026 EU Council Presidency, a stage set for profound change rooted in simplification and competitiveness. So, as global markets shift and the pressure mounts, the big question is: will Ireland use this moment to iron out the kinks and turbocharge its economic future? Dive into the details and discover PwC’s no-nonsense game plan for keeping Ireland ahead of the curve. LEARN MORE

PwC has urged the government to continue to address capacity constraints in housing, infrastructure and employment in the next Budget.

In publishing a suite of recommendations for Budget 2027, PwC said that Ireland enters this budget cycle from a position of strength, characterised by a strong fiscal position, high employment and the economy continuing to outperform many of its peers.

It warned, however, that mounting capacity constraints now risk undermining future growth.

“Housing shortages, infrastructure bottlenecks, grid congestion, energy supply challenges, persistent skills gaps and cost pressures are immediate risks shaping Ireland’s economic outcomes,” said Padraic Burke, head of tax at PwC.

“In response, we are calling for targeted, practical measures in Budget 2027 across innovation, renewable energy, modern construction and private enterprise to sustain growth, ensuring a competitive economy where prosperity is shared across regions.

“Budget 2027 will be introduced during Ireland’s 2026 Presidency of the Council of the EU.

“Competitiveness is a core theme of Ireland’s Presidency, with simplification forming a key part of that agenda, and Budget 2027 will be an important opportunity to advance these priorities.”

PwC wants to see a renewed focus on innovation as the key driver of productivity and living standards.

While Ireland remains a global leader in attracting high-value research and development (R&D), PwC notes a widening gap between multinational firms and the broader domestic economy.

The company said that R&D tax credit is “misaligned” with modern R&D delivery models, where outsourcing is often required to access specialist expertise.

To address this, the firm proposes targeted reforms to address specific limitations, in order to enhance Ireland’s competitiveness, modernise Ireland’s R&D tax framework and strengthen Ireland’s attractiveness as a global innovation hub.

These include allowing connected-party outsourcing to qualify for R&D tax credits, increasing the third-party outsourcing cap from 15% to 30%, and expanding outsourcing eligibility for industry collaboration with universities and higher education institutes.

In addition, PwC has identified a “missing middle” in current policy, ie innovation activities that fall outside traditional R&D definitions but are critical to productivity.

PwC recommends the introduction of a separate innovation incentive for broader innovation activities to support investment in areas such as digitalisation and decarbonisation and allow firms to adopt new technologies and scale their operations more effectively.

The professional services group has urged targeted tax support for investment in modern methods of construction to stimulate housing delivery.

PwC also recommends reintroducing a temporary development levy waiver to lower upfront costs and unlock stalled projects.

In addition, the firm is calling for measures to support retrofitting and regeneration, including a tax credit linked to Building Energy Rating (BER) improvements and time-limited tax exemptions for the sale of refurbished derelict properties.

Other suggested measures include a phased reduction in capital gains tax to 20% to encourage investment and to retain business ownership in Ireland.

PwC has also proposed a new scale-up relief for entrepreneurs and increasing the lifetime limit for Revised Entrepreneur Relief from €1.5m to €5m to incentivise founders to grow their businesses in Ireland.

Further, PwC advocates for the introduction of Employee Ownership Trusts (EOTs), modelled on the UK system, to enable business owners to transfer ownership to employees for the purposes of job retention, local economic resilience and long-term business stability.

PwC also recommends introducing a reduced corporation tax rate of 6.25% for start-up and early-stage companies not within the scope of the global minimum tax rules, linked to new or incremental investment and expenditure, to encourage firms to expand operations in Ireland.

The Big Four firm has welcomed the Minister for Enterprise, Tourism and Employment’s cross-government initiative to eliminate red tape and streamline administrative processes for businesses.

The firm’s proposals are widely themed around simplification, particularly for SMEs, including the introduction of short-form, pre-populated corporation tax returns, alongside a broader “root and branch” review of the tax system to ensure it is more accessible and proportionate for smaller businesses.

PwC advocates for a shift from real-time to annual reporting requirements for certain employer obligations, reducing administrative burdens while maintaining transparency.

In addition, PwC recommends updating the employee small benefit exemption by retaining the annual limit of €1,500 but reducing the numerical cap of five, in order to afford employers greater flexibility in how they recognise employees.

“Budget 2027 represents a critical opportunity to move beyond incremental change and adopt a strategic, delivery-focused approach to policymaking. By prioritising innovation, clean energy, housing delivery and indigenous enterprise, Ireland can expand its economic capacity, strengthen resilience and position itself for the next phase of growth,” said Paraic Burke.

PwC Ireland — PwC has published its 2027 Budget recommendations.

“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.

“As Ireland’s EU Presidency aims to deliver tangible benefits for people, companies and communities across the EU, a strong focus on competitiveness supported by simplification will help shape this work. Budget 2027 offers an opportunity to help turn those ambitions into concrete measures.”

Photo: Paraic Burke. (Pic: File)