The growing problem of salary inflation was highlighted at last night's annual Irish Software Association (ISA) awards, when association chairman, Mr Gerry Jones, called on the Government to reduce taxation on share options from 46 per cent to 20 per cent.

Addressing the Minister for Science and Technology, Mr Noel Treacy, who attended the event in the Royal Hospital Kilmainham, Mr Jones said: "Reducing the tax rate would curb wage inflation and increase Ireland's ability to compete globally for staff in the face of a world skills shortage.

The recent proposal by British Chancellor, Gordon Brown, of a zero tax rate on employee shares is even more radical than the ISA proposal and places Irish software firms at a competitive disadvantage to British companies."

Trintech, the software payments company which recently floated on the US Nasdaq and German Neuermarkt exchanges, was named 1999 software company of the year. The group now employs 275 people and has offices in Ireland, Australia, Germany and the US.

In the innovation category, International Financial Services (IFS) was awarded for its advances in delivering specialist trading software to the international financial community. Last June, computer giant Intel and Deutsche Bank acquired a joint stake of 14 per cent in IFS.

Norkom Technologies, a specialist in customer analysis and relationship management software, was named new company of the year. Founded last year, the company now employs over 90 people.

Now in its seventh year, this year's awards were sponsored by Davy Stockbrokers, Enterprise Ireland and Logica.