THE IRISH Exporters’ Association (IEA) has warned the Government not to cripple the export sector with harsh taxes in the upcoming emergency budget.

The IEA announced concerns that any new taxes should not reduce Ireland’s ability to compete on an international level.

“The IEA are fully aware of the exceptional collapse in exchequer revenue and that some additional tax measures will have to be introduced.

“However, any tax measures should not reduce our capacity to compete internationally, and should be capable of introduction with minimum administration difficulty from a business point of view,” said IEA chief executive John Whelan.

Mr Whelan added the international landscape for Irish exporters had changed dramatically over the past six months, with many customers becoming victims of the recession.

“Trade finance, the key lubricant of international trade has dried up and credit has become a very scarce commodity.

“Against this background it is essential that the Government in the emergency budget ensures that the correct balance is struck between the necessary measures to reduce public sector expenditure and stimulate the economy, particularly the export sector where greatest opportunity lies to restore growth.”

The IEA outlined further recommendations, including stimulating the export sector to drive the economy by cutting energy-related costs by a further 20 per cent and reducing wage costs by 15 per cent across the public and private sector.

The association called to stem the loss of trade finance with a Government guarantee scheme to support export credit insurance and increase lending to the small business sector by 50 per cent.

In addition, the IEA want current public sector expenditure reduced and no increase on corporation tax, employers’ PRSI, or excise duty on diesel for transport.

It also suggests providing a short-term grant scheme to support exporter’s cash flow requirements over the next two years and prevent unnecessary market and job losses.

The association also believes an increased income levy for 2009 and 2010 would be welcomed and could raise €1.5 billion.

However, the IEA suggested creating a multi-year fiscal strategy for businesses and households to know what tax burdens to expect over the next five years and to continue productive capital investment through a reconfigured national development plan.