ISME has today published its Pre-Budget Submission 2027, setting out tax and expenditure reforms aimed at strengthening indigenous enterprise and reducing the State’s dangerous overreliance on a small number of multinational corporations. ISME say that decades of Government policy prioritising inbound Foreign Direct Investment must pivot towards scaling indigenous business.
The submission warns that having just 297 companies (0.1% of total) account for 84% of total corporation tax receipts in 2025 poses a systemic threat to public finances, the income tax base, and the wider domestic economy. ISME says the Government must now address this risk by rebalancing the economy to support Irish SMEs and indigenous businesses.
The submission sets out seven policy goals to achieve this rebalance:
- Development of a tax system that encourages scale-up.
- Ensuring a competitive indigenous enterprise base rather than seeking to develop individual champions.
- Providing businesses with ready and affordable access to capital.
- Providing an educational system that addresses the educational under-performance of adults, and our deficits in life-long learning.
- Ensuring Ireland’s FDI policy attracts businesses which have positive spill-over effects for indigenous enterprise.
- Ensuring objective-oriented enterprise policy drives tax policy, not the other way round.
- Wrapping these objectives into a coherent enterprise strategy, like that of Italy’s Industry 4.0 strategy.
Neil McDonnell, Chief Executive of ISME, said: “Ireland’s economic success has been remarkable, but it has been built on a dangerously narrow foundation. Our tax base is built on a very small number of companies, and this is simply not sustainable. For many years our enterprise policy has overseas multinationals at the expense of local business, particularly in the areas of R&D supports and key employee engagement. Budget 2027 must make a decisive turn towards building a resilient, home-grown enterprise sector; one that employs the majority, generates wealth in every region, and is not vulnerable to the decisions of a handful of boardrooms abroad. We have the policy. We have the analysis. We now need the political will to act.”
The submission is anchored in ISME’s Indigenous Enterprise Policy published in March and
highlights that Ireland has the lowest entrepreneurial participation rate for 20–29-year-olds in the EU27, at 5.1% against an EU average of 7.9%. It also points to the steady decline in SME credit in construction, retail, hospitality and community services over the past four years, even as GNI grew by 43% over the same period. ISME says this mismatch between available capital and SME investment is one of the most significant missed opportunities in the Irish economy. ISME supports government proposals for a savings and investment regime as an essential enabler of the EU Savings and Investment Union.
On skills, ISME warns that the Skillnet Ireland budget has been cut 16%, from €63m in 2025 to €54.2m in 2026, despite employers contributing €1.2 billion annually to the National Training Fund. ISME is calling for Skillnet funding to be restored to a minimum of €100m in Budget 2027, and for Ireland’s apprenticeship and vocational education systems to be brought in line with the best-performing small economies in Europe.
ISME’s full Pre-Budget Submission 2027 is available here
