ICTU seeks tax break for low paid

The trade union movement wants Finance Minister Mr Brian Cowen's first Budget to take workers on the minimum wage out of the tax net and end property-based tax breaks.

The Irish Congress of Trade Unions (ICTU) yesterday presented its pre-budget submission to Mr Cowen. It calls on him to exempt workers on the minimum wage - €7 per hour or €273 weekly - from paying income tax.

The document also calls for workers on the average industrial wage of €29,879 to be taken off the higher 42 per cent, and 80 per cent of workers to be shifted to the standard 20 per cent rate.

ICTU's submission also calls for the Government to charge a levy of €5,000 on all four-wheel drive sports utility vehicles engine capacities above 2.4 litres - a move they see as warranted on environmental grounds. It also suggests the State should buy the Westlink toll bridge from its operator, National Toll Roads (NTR), and abolish the toll charge to cut down on congestion.

ICTU secretary general, Mr David Begg, told a press conference yesterday that the congress wanted the Minister to increase tax credits and adjust tax bands to take inflation into account.

ICTU also wants the pay-related social insurance (PRSI) allowance to be raised to €198 from €127 a week, the exemption threshold to be €386 a week and the health levy threshold to be moved to €479 a week.

Mr Begg said that ICTU wants Mr Cowen to introduce a minimum tax relief for childcare of €20 a week, increasing to €50 a week for parents using approved childcare.

The organisation, to which most of the State's unions are affiliated, wants property-based tax relief eliminated and other breaks capped where appropriate.

Economic adviser Mr Paul Sweeney argued that it was "ridiculous to be incentivising property investment in a booming property market."

Mr Sweeney estimated that getting rid of the various reliefs would bring an extra €500 million to €1 billion to the Exchequer. But, he added, this calculation was based on out-of-date figures and limited information.

The document reiterates ICTU's call for a review of the Republic's 12.5 per cent corporate tax rate. Mr Begg acknowledged that this was unlikely to happen. However, he argued, higher tax rates did not act as a bar to investment in the UK, and it was unlikely the EU would ultimately allow the State to persist with it.