{"id":471725,"date":"2026-05-06T19:11:13","date_gmt":"2026-05-06T19:11:13","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/471725\/"},"modified":"2026-05-06T19:11:13","modified_gmt":"2026-05-06T19:11:13","slug":"savings-scheme-should-be-delayed-rather-than-poorly-designed-economists-warn-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/471725\/","title":{"rendered":"Savings scheme should be delayed rather than poorly designed, economists warn \u2013 The Irish Times"},"content":{"rendered":"

The Government\u2019s special savings scheme<\/a> will be a waste of time if it is not done right, An Oireachtas committee has heard. Changes to the taxation of savings and investments are required to make sure the average person will want to invest in capital markets through the vehicle.<\/p>\n

Two economists, University College Dublin\u2019s Enda Hargaden<\/a> and Trinity College Dublin\u2019s Barra Roantree<\/a>, told the Oireachtas finance committee this afternoon that the Coalition should consider delaying the introduction of the personal investment account (PIA) scheme to properly calibrate other aspects of the tax system.<\/p>\n

Precise details of the scheme, which Minister for Finance, Simon Harris<\/a> has indicated will be unveiled in Budget 2027, are yet to be disclosed.<\/p>\n

However, responding to a question from Fianna F\u00e1il TD, Shay Brennan, Hargaden and Roantree said the basic idea of the saving scheme, which aims to tap some of the \u20ac170 billion currently on deposit in Ireland, conflicts with an existing tax rule known as deemed disposal. <\/p>\n

Under the deemed disposal regime, investors in exchange-traded funds (ETFs) and other funds pay 38 per cent exit tax (recently reduced from 41 per cent) on profits every eight years, even if they have not sold their investment.<\/p>\n

ETFs are considered a particularly suitable product for the kinds of investors the Government hopes to entice through the personal investment account scheme because they allow inexperienced investors to spread risk through a basket of stocks rather than betting on individual shares.<\/p>\n

If deemed disposal is applied to ETF investments through the Government\u2019s new savings accounts, the PIA scheme will not work, Hargaden said. <\/p>\n

\u201cWe would be wasting our time if we introduced this vehicle and people had to deemed dispose if they have an ETF,\u201d he said. \u201cIt just won\u2019t work. [The benefits] will only flow to those with accountants and that kind of thing.\u201d<\/p>\n

He said legislative changes would likely be required to make sure that ETFs are taxed differently within the new savings vehicle than if held otherwise. <\/p>\n

Asked whether the Coalition should consider delaying the roll-out of the scheme, Hargaden said: \u201cI would encourage perhaps delaying this maybe a year, to get deemed disposal closer to being simple for the retail investor. If this needs to be delayed for a while, I think that\u2019s desirable.\u201d<\/p>\n

Roantree said: \u201cHistory is ripe with examples of where rushed tax legislation leads to bad consequences, and I think this is one where you want to make sure you get it right. <\/p>\n

\u201cIf that involves taking longer than this budget cycle to get what is really quite a big change in the taxation of savings and investments, then it should be delayed until it can be done properly.\u201d <\/p>\n

Roantree said that while there are arguments for creating the new savings scheme, the question is whether the State should be subsidising those benefits \u201cthrough tax forgone\u201d. <\/p>\n

The Coalition has floated the idea of levying a low flat rate tax against investment gains made through the savings scheme.<\/p>\n

Roantree said that if the scheme is \u201cdesigned poorly\u201d, there is potential for people who were already investing in stocks and funds to keep investing, \u201cbut now they do it through this account and don\u2019t pay tax\u201d.<\/p>\n","protected":false},"excerpt":{"rendered":"The Government\u2019s special savings scheme will be a waste of time if it is not done right, An…\n","protected":false},"author":2,"featured_media":471726,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[174],"tags":[38420,10471,79,179,18,206997,143364,19,17,163128,44,63,3275],"class_list":{"0":"post-471725","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-barra-roantree","9":"tag-budget","10":"tag-business","11":"tag-economy","12":"tag-eire","13":"tag-enda-hargaden","14":"tag-finance-committee","15":"tag-ie","16":"tag-ireland","17":"tag-savings-and-investment-union","18":"tag-simon-harris","19":"tag-trinity-college-dublin-tcd","20":"tag-university-college-dublin-ucd"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/116529219745800658","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/471725","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=471725"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/471725\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/471726"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=471725"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=471725"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=471725"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}