THE government has been warned that its new Savings and Investment Account scheme will result in Irish household cash flowing into large US tech giants at the expense of Irish businesses.

David Jelly, CEO of alternative housebuilding finance provider Property Bridges, issued the warning after Finance Minister Simon Harris outlined details of the flagship scheme on Monday.

Minister Harris said the new tax-advantaged accounts, expected to open to savers in 2027, will cover listed shares and bonds, other regulated-market instruments, and retail investment funds such as ETFs. The scheme is designed to incentivise Irish savers to invest some of the estimated €170bn currently held on deposit in banks.

However, there has been no indication from the government that regulated non-listed investments – such as crowdfunding platforms – which are dedicated to providing capital for Irish SMEs will qualify. 

Mr Jelly said this means a saver who buys shares in a large US technology company could get favourable tax treatment, while someone who invests the same money into an Irish business through a regulated Irish platform would not.

‘This is a strange policy contradiction,’ he said. ‘Europe has spent years building a regulatory framework – the European Crowdfunding Service Providers Regulation – specifically to connect investors with businesses that need capital. 

‘Yet Ireland’s scheme, as it stands, looks set to reward investment in large US corporations ahead of investment in Irish businesses building homes and creating jobs here.’

Irish households currently hold just 2.3% of their financial assets in direct investments, against an EU average 7.5%, with an estimated €170bn sitting in bank deposits earning little or no return.