Financial Services Ireland (FSI), the representative body for companies in the Irish Financial Services Centre (IFSC), has strongly criticised the Minister for Finance, Mr Cowen, for abolishing the remittance basis for taxation.

Speaking at the FSI's annual lunch in Dublin yesterday, the association's chairman, Denis Casey, claimed the change had removed "an important strategic mechanism to attract foreign talent into Ireland".

He said FSI was "deeply disappointed by the unhelpful changes" in the Finance Bill. Mr Casey, chief executive of Permanent TSB, called for "a better analysis of perceived problems" in the future.

He urged the Minister, who was present at the lunch, to consider "meaningful dialogue before pre-emptive action is taken and developing responses that are more sophisticated."

He said the entire economy should not be held to account because issues arise in a particular sector.

While Mr Casey did not refer to any sector in his address, there is a belief that the remittance system was abolished partly in response to the controversial remuneration policies of Turkish construction company Gama.

"Sometimes, differentiated or targeted treatment is required, not just because fairness demands it, but because it is in the national interest to do so," Mr Casey said.

He reminded Mr Cowen that IFSC companies paid €700 million in corporation tax in 2004, more than one-eighth of the total corporation tax take that year.