IN ITS LATEST set of demands, employers’ group IBEC has told the government it should drop its planned tax hikes in this year’s budget.

In an early submission, the organisation has urged the coalition to use Budget 2014 as a “signal that the end of austerity is in sight” now that the deficit-reducing programme is ahead of schedule.

It believes that an increased tax burden of €500 million could undermine growth and set back Ireland’s recovery. There are plans to introduce a total of €3.1 billion in tax rises and spending cuts come October as attempts continue to reduce the country’s deficit.

“The economy and Irish workers are taxed enough, the focus should be on ways to reduce the tax burden,” said chief executive Danny McCoy.

The remaining adjustment should be made by growing the economy and reducing public expenditure. We continue to spend more than we can afford.

McCoy also warned against ‘pushing’ sick pay costs onto employers and further price rises for health insurance premiums, stating that “additional costs will push already struggling firms out of business, fueling the unemployment crisis”.

The submission, which has been submitted early as Budget 2014 will be read in October this year rather than the usual December announcement, included other key priorities, including support for the hospitality sector with the retention of the lower 9 per cent VAT rate and lower employer PRSI rate for low-wage workers; an enhanced R&D tax credit scheme and a preferential entrepreneur’s capital gains tax regime.

IBEC has also asked for home improvement works to be encouraged through a tax credit or grant incentive scheme.

Budget 2014: Burton will look to protect core welfare payments

NERI publishes alternative approach to Ireland’s budgetary policies