The president of SIPTU has called on the Government to change tax allowances and bands in the next Budget to take the low-paid out of the tax net, saying it is now "pay-back time" for the workers landed with huge tax bills over the years.
Mr Jimmy Somers called on the Minister for Finance, Mr Mc Creevy, to use the Budget to ensure 80 per cent of the workforce paid the standard rate of tax.
The SIPTU leader said the union wanted the emphasis to be on the lower- and middle-income groups. "The last tax package was £591 million. The Government can at least go to £950 million on this occasion. This will help them honour some of their own policy commitments, but the most important political commitment as far as we are concerned is that 80 per cent of people pay tax at the standard rate."
Mr Somers said for a long time it had been accepted that the PAYE worker paid a disproportionate amount of tax. "This has been unacceptable. We have now reached pay-back time."
He said it was not necessary for the Government to take as much any more from the lower- and middle-income groups. "Before they had to take to provide the necessary services. There was more dependency with less people in employment and those who had jobs had to pay more, but there are still people on very low rates of pay in the tax net."
Mr Somers said on the RTE Radio 1 This Week programme that there was no point in arguing with the Government about the statutory minimum wage if people had to pay tax on that wage.
"The emphasis should be on increasing the allowances and the bands to take the very low-paid people out of the net. I am talking for example about pensioners with low pensions who are still in the tax net. That does not make sense.
"We are also concerned about people below the average industrial earnings of £17,000 who are still paying tax at the higher rate. That should not be. The bands will have to be increased to ensure they are taken out of the higher tax rate." Mr Somers said the Government should not look at introducing an intermediary tax rate until it fulfilled its promise to have 80 per cent of people on the standard rate of tax.