742. Deputy Barry Heneghan asked the Tánaiste and Minister for Finance the reforms to the taxation system being considered to better support indigenous SMEs to scale, invest and expand, including whether changes are being examined to ensure the tax system encourages business growth rather than creating barriers to expansion; and if he will make a statement on the matter. [60621/26]

A number of tax incentives are in place which are intended to encourage investment in indigenous businesses, particularly in SMEs. These measures include the Employment Investment Incentive (EII), the Start-Up Capital Investment (SCI) and the relief for investment in innovative enterprises, also known as Angel Investor Relief. In addition to these reliefs the R&D Tax Credit makes a significant contribution to Ireland's SMEs, helping them expand and innovate thereby improving competitiveness.

The Employment Investment Incentive (EII) provides a platform for investment in certain SMEs. It provides tax relief for individuals who purchase qualifying trading company shares. The relief aims to encourage individuals to provide equity-based finance to trading companies, to assist companies to raise finance to allow them to expand and create or retain jobs. Over €450 million has been invested in Irish SMEs between 2020 and 2023 through the EII scheme.

The Start-Up Relief for Entrepreneurs (SURE) is a tax relief for entrepreneurs who leave an employment to set up their own company. It can provide a refund of income tax paid in previous years where the individual establishes a new trading company and invests cash through the purchase of shares.

The Start-Up Capital Investment (SCI) is a tax relief for early-stage micro companies to attract equity-based risk finance from family members.

Under the CGT Revised Entrepreneur Relief, eligible individuals can avail of a reduced CGT rate of 10 percent on the disposal of qualifying business assets, up to a lifetime limit of €1 million (increasing to €1.5 million from 1 January 2026). This relief is broadly based and is aimed at company founders/key employees who must satisfy working time requirements in order to be eligible. In 2023 1,364 taxpayers availed of the relief representing a cost to the Exchequer of €156 million.

Angel Investor Relief is a targeted CGT relief for angel investors in innovative start-up SMEs. This relief aims to assist SMEs in attracting investment and make Ireland a more attractive location for angel investment. It does so by allowing angel investors to benefit from a reduced rate of CGT (between 16 percent and 18 percent) on a gain of value up to twice the value of the investor’s initial investment, subject to a €10 million cap.

These tax incentives have undergone significant change in recent years following feedback from stakeholders, in particular within the SME community.

A range of direct expenditure supports are also available to businesses, and details can be found online on the National Enterprise Hub.

As the Deputy will be aware, decisions on any potential amendments to current reliefs or the potential introduction of new tax reliefs are usually made in the context of the annual Budget and Finance Bill process and at the appropriate time.