Ambition Unlocked: What Budget 2027 Must Deliver for Ireland's SME Engine

Ireland’s indigenous enterprise base stands at a critical juncture. While our economy has historically benefited from strong multinational investment, the two in three Irish workers employed by local businesses are navigating an increasingly complex operational climate.

Over recent years, SMEs have absorbed a relentless series of cost hikes - from energy market volatility to cumulative statutory employment expenses.

According to data from the Small Firms Association, average business costs in Ireland have escalated by 44.4% over the past three years.

Furthermore, our latest Azets Barometer reveals that elevated labour costs are now the single greatest concern for 37% of business leaders, while two-thirds cite recruitment and retention as a primary bottleneck to scaling.

To move from short-term survival measures to long-term strategic resilience, Budget 2027 must deliver a clear reset for domestic enterprise. Below are three core pillars where tax, fiscal policy, and regulatory relief can directly unlock the growth ambition of Irish business.

1. Stabilising the cost base and removing administrative friction

The cumulative weight of administrative mandates - including auto-enrolment, pay transparency, minimum wage adjustments, and Enhanced Reporting Requirements (ERR) - has diverted valuable resources away from core business expansion. Budget 2027 should offer immediate stability through targeted relief:

• Employment cost pause: Defer planned increases in employer PRSI rates to 2027, implement a cap on future contribution rates for SMEs, and freeze minimum wage rate adjustments alongside new statutory entitlements through 2030 to give businesses cost predictability.
• Tax and regulatory simplification: Introduce a simplified SME tax package to streamline filing, transition ERR reporting from real-time to a manageable month-end basis and enact a mandatory SME Impact Assessment requiring the Department of Finance to publish estimated compliance costs before enacting any new tax measure.
• Overhead relief: Introduce a targeted €50,000 green energy grant for mid-sized firms investing in renewables, simplify commercial rates, and institute a rate increase moratorium until 2030.

2. Winning the talent and technology advantage

With multinational employers competing heavily for skilled workers, indigenous firms require a more agile set of tools to attract, retain, and upskill talent.

• AI and digital upskilling: Allocate €350 million from the National Training Fund surplus specifically for AI and digital skilling within SMEs, backed by a direct €20,000 AI training grant for growing firms.
• Modern remuneration packages: Reform employee share schemes into a truly commercial model for private SMEs, increasing the Small Benefit Exemption threshold to €2,000 per year (removing the five-benefit cap), and remove restrictions on employer pension salary sacrifices to broaden benefits packages.
• Electric vehicle benefits: Retain the 2026 Benefit-in-Kind relief thresholds for electric vehicles to support sustainable fleet transitions without penalising employees.

3. Mobilising capital and opening access to growth

Facing international expansion and facilitating business succession remain persistent hurdles, with 32% of business leaders reporting difficulties accessing competitive capital. Budget 2027 presents a prime opportunity to channel domestic strength into long-term enterprise capacity.

Capital mobilisation

• Key recommended reform: Establish a €5bn “Home Grown Investment Fund” from excess corporate tax receipts.
• Strategic objective: Provide dedicated capital to help indigenous Irish firms scale into global markets.

Capital taxes

• Key recommended reform: Set a roadmap to reduce Capital Gains Tax to 20% by 2030; raise Capital Acquisitions Tax threshold to €50,000.
• Strategic objective: Align Irish capital taxes with European averages and remove barriers to family business succession.

Innovation supports

• Key recommended reform: Simplify R&D Tax Credit routes for mid-sized firms and condense the payment schedule into one year for SMEs.
• Strategic objective: Drive rapid innovation cycles and broaden SME participation.

Public procurement

• Key recommended reform: Mandate a statutory 30% SME target in government contracts and split large tenders into smaller lots.
• Strategic objective: Anchor domestic supply chains and lower entry barriers for mid-sized contractors.

Market expansion

• Key recommended reform: Launch an Export Readiness Fund via Enterprise Ireland and LEOs targeting non-exporting SMEs.
• Strategic objective: Double the proportion of exporting Irish SMEs by 2035.

Looking ahead to Budget Day 2027

Ireland’s economic future depends heavily on whether we can create an environment where local business owners can confidently invest, hire, and expand. Budget 2027 should mark the shift from crisis response to strategic investment in domestic enterprise.

• Download the Azets Ireland Pre-Budget Submission PDF for an in-depth look at our key proposals.
• Prepare your strategy: How are rising input costs or compliance requirements impacting your financial planning for the upcoming fiscal year? Reach out to our Tax and Advisory teams to discuss how prospective policy changes may affect your growth strategy.
• Read what to expect in the 2027 Budget.