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Use tax to nudge green behaviour — PwC

Consulting firm PwC has called on the Government to introduce a range of tax breaks in Budget 2022 to encourage ‘greener’ behaviour from businesses and individuals.

In its submission, it says that using certain “tax levers” would help Ireland to achieve its environmental targets.

'Help to Insulate' scheme

The firm calls on the Government to consider a new ‘Help to Insulate’ scheme to incentivise homeowners and landlords to retrofit their properties.

PwC also says that homeowners could be given a property tax credit for retrofit costs, or relief from capital gains tax on homes that have been retrofitted.

Park-and-ride

On transport, the firm urges the reintroduction of tax relief for investment in ‘park-and-ride’ schemes. It also calls for commuters to be allowed to claim tax back from transport costs in a “more flexible and extensive way”.

PwC suggests a range of incentives to encourage people to buy electric or hybrid vehicles — including reduced rates of VRT and VAT.

Green-finance hub

One of its main suggestions is the promotion of Ireland as a ‘green-finance hub’, by encouraging investment in environmental, social and governance (ESG) funds.

Among the firm's proposals are reductions in the rates of two taxes — investment undertaking tax and life assurance exit tax — to 20%. This cut would benefit only investment funds and insurance products that invested in environmentally friendly activities. 

PwC also calls for other tax changes to make investment in renewable-energy projects and other infrastructure projects more attractive.

The firm also wants an extension of the rules on capital allowances to cover energy-efficient aircraft.