Business representative body Chambers Ireland has called on the Government to cut VAT rather than income tax in the forthcoming budget and to replace stamp duty with a "re-balanced" property tax.
In its pre-budget submission, the organisation said this was a "less obvious, but equally consumer friendly and more equitable approach to tax reform".
John Dunne, Chambers Ireland
Chambers Ireland John Dunne said that in a pre-election budget with healthy public finances, it was "unrealistic" to pretend there will not or should not be some "giveaway" element.
"However, this realpolitik does not preclude a genuinely strategic approach to restructuring or rebalancing the public finances," he said.
"By cutting VAT instead of income tax, consumers still benefit in terms of more money in their pockets and reduced prices. But it would also be less inflationary and more equitable - one third of the population doesn't pay income tax whereas cutting indirect taxations benefits all consumers," Mr Dunne said.
Chambers Ireland, which represents 60 chambers of commerce, in turn representing around 12,000 businesses, also called on the Government to change the structure of property taxation in order to generate a revenue stream for local government.
"The Tánaiste recently suggested that the exchequer could afford to abolish stamp duty and forgo the €3bn generated from that tax," Mr Dunne said.
"This is underlined by the ESRI's analysis yesterday stating that Minister Cowen has almost €3bn discretionary funding available for this budget this year.
"On the other hand, the Indecon report into the financing of local government earlier this year projected that within four years, additional expenditure of €2bn will be required for local authority service levels to be simply maintained."
"Linking these two facts, Chambers Ireland is calling on the Government to replace stamp duty with a re-balanced property tax that is ring-fenced for local authority spending.
"Local communities would be transformed by such an injection of discretionary funding which would dramatically underpin services to business and quality of life."
Chambers Ireland suggested standardising the VAT rate at 18 per cent and an increase in VAT exemption thresholds. Among other measures outlined in its submission, it also called for a comprehensive strategy on pensions and the further development of the national childcare strategy.