The Minister for Finance, Mr Cowen, has rejected calls from the Irish Congress of Trade Unions (ICTU) to raise taxes in order to fund public services.

Speaking at a book launch at the Institute of Taxation last night, Mr Cowen said he had met ICTU on Tuesday when it presented its pre-Budget submission and they had "agreed to disagree" on the issue.

The Chambers of Commerce of Ireland (CCI) last night also strongly rejected ICTU's call to increase corporation tax. ICTU "is barking up the wrong tree in terms of tax reform", it said in a statement yesterday.

ICTU's position is that corporation tax - currently 12.5 per cent - should be levied at the same rate as the basic rate of income tax, currently 20 per cent. It has also said that we need a national debate on the appropriate level of taxation needed to pay for public services in the years ahead.

However, Mr John Dunne, CCI chief executive, said yesterday that the tax debate "should focus in the first instance on the value for money that the taxpayer receives, not on how to grab more euros to throw in the maws of an insatiable public sector."