The Small Firms' Association is seeking cuts in income tax rates, employers' PRSI and the standard VAT rate to make the State "competitive in every aspect of commercial activity".

Presenting the SFA's pre-Budget submission yesterday, its chairman, Mr Kieran Crowley, said there was a significant case for reducing the top income tax rate from 46 per cent to 40 per cent and the standard rate from 24 per cent to 22 per cent.

He said a competitive small business sector was crucial to the economy and would create more than 60,000 jobs this year. He described employers' PRSI as a tax on providing well-paid, skilled jobs and said the ceiling should be reduced to the 1998 levels of £28,000.

Tax reductions, however, had to be made on the basis of wage moderation. "The cost of doing business in Ireland must be constantly benchmarked against that of our competitors. We much continue to improve productivity and lower costs to indigenous industry," he said.