The technology sector is lobbying hard for changes to the legislation governing employee stock options in the forthcoming budget.

At present, gains made from the conversion of employee stock options to cash are taxed at the higher income tax rate of 46 per cent. But the high-tech industry, which relies heavily on rewarding workers with stock, is pressing for stock option returns to be charged as a capital gain at the 20 per cent rate.

It is arguing for the change on the basis that it would help attract workers to an industry currently suffering from severe staff shortages in certain areas.