Opposition says measures favour well-off

Reaction: The Opposition condemned the Finance Bill as favouring the well-off and the business sector through introducing and extending tax breaks while pushing more PAYE workers into the higher-rate tax band.

Fine Gael finance spokesman Mr Richard Bruton said the Finance Bill made no attempt "to address either the fairness of the tax code, or value for money from public spending".

He said it contained "many of the undesirable features of Budget 2004", including the failure to increase any of the basic personal tax credits; the heavy reliance on stealth taxes and charges; and the failure to reduce levies that are putting homes beyond the reach of first-time buyers.

"The Minister is reintroducing property-based tax breaks, barely 12 months after he won public praise for his decision to eliminate them".

Labour's finance spokeswoman, Ms Joan Burton, complained that, in pressing ahead with the tax regime revealed in the December Budget, Mr McCreevy had "copper-fastened his stealth taxes on the PAYE sector, which are funding silent tax breaks for the wealthy".

"For years, the Minister and Fianna Fáil have promised faithfully that 2004 would be the final year for the glut of property-based tax shelters that have crept into the tax code over the years," she said. However, instead of dismantling tax shelters, the Finance Bill extends them.

This was in marked contrast to the treatment of modest PAYE income earners. "It is a serious breach of faith with the majority of taxpayers to force more than 50 per cent of PAYE earners into the higher-rate band in this way."

The Green Party's finance spokesman, Mr Dan Boyle, said the new measures proposed in relation to company share dividends were a further aid to the corporate sector and were not consistent with EU competition rules. "Questions need to be asked as to why the Minister feels these changes are necessary given our already low rate of corporation tax."

He said there was still no reference to introducing a carbon tax and no firm commitment to reducing duty on biofuels.