Any Government-backed savings and investment scheme should not tax people on entry, according to Ibec group Financial Services Ireland.
It also recommended that the deemed disposal rule is removed - and capital gains tax or income taxes are not applied when customers cash out of their investments.
The group representing the financial services industry has released the recommendations ahead of the Government's first Annual Savings and Investment Forum.
"As a group, we brought a great deal of experience across different sectors and together we had a mission of providing a blueprint for the introduction of savings and investment accounts that have tax advantages and are accessible to investors of all income levels," said Eoin Fitzgerald, Chairperson of the FSI SIA Taskforce and Country Head for Brown Brothers Harriman.
"Through that, we hope to develop a retail investment culture in Ireland as consumers become more comfortable with owning investment products such as stocks, bonds, investment funds and exchange traded funds," he added.
The taskforce’s recommendations provide guidance on the design and implementation of SIAs and include two key goals, which are:
1. Help more people in Ireland become financially resilient through investing.
2. Get more money into capital markets to help fund economic growth.
FSI Director Patricia Callan commented that as country we are a nation of savers, and that while keeping some money in deposit accounts is necessary, there is a blind spot when it comes to retail investing in Ireland.
"There is a perception that holding cash on deposit is risk-free, yet we know that in reality with inflation, Irish citizens are losing money over time," she said.
"Although markets can go up and down at any given time, historically, over a longer time period – five, ten or twenty years – investing has provided solid returns for investors and an opportunity to build wealth," said Ms Callan.
She added: "We hope these recommendations from our Taskforce can help with the introduction of SIAs, which will be an important step in changing Irish attitudes towards investing.
