The Government should introduce a tax break in the upcoming Budget to help people buy computers and to encourage the uptake of technology in the home, according to a lobby group for the technology industry.
The Government must also resist pressure from Europe for tax harmonisation, which would threaten the Republic's 12.5 per cent corporate tax rate, the group said.
ICT Ireland's pre-Budget submission to the Government says that a tax break for people who purchase personal computers would act as an incentive to increase the use of the internet and ICT while at home.
Mr Peter McManamon, chairman of ICT Ireland's taxation committee and a partner in Seers Partners, said a tax incentive scheme was introduced in Sweden by the government to encourage use of computers in the home.
"The approach has proven to be successful with significant growth. The UK has recently adopted a similar approach under its home computing initiative, where staff can be offered PC packages with more than 50 per cent discount compared to the equivalent retail price."
ICT Ireland also asks the Government to remain committed to its existing corporate tax regime and resist pressure towards EU tax harmonisation.
"Any change in stated Government policy to retain a 12.5 per cent corporate tax rate would be detrimental to our chances to retain and attract foreign direct investment to Ireland," said Mr McManamon.
"Over the past few years, as the marginal rate of corporate tax has been reducing, the tax take has increased from €2.16 billion in 1997 to €5.16 billion in 2003."
Corporate tax has also been the most important feature enabling the State to attract 25 per cent of US investment in Europe over the past decade, he added.
ICT Ireland also warns against making changes to the PRSI system and asks for the retention on the existing ceiling on PRSI.
"Overall, labour costs in Ireland have been rising faster than in any other EU country for a number of years, with nominal compensation per employee (before tax) growing on average 37.1 per cent over the period 1998 to 2003."
