ISME commends inflation drop but warns against tax increase

The Irish Small to Medium sized Enterprises has welcomed the reduction in the inflation rate from 2.9% to 2.3% but warned the Minister for Finance Charlie McCreevy against using it as an excuse to increase taxes in the upcoming Budget.

Chief Executive Mark Fielding pointed out that while the inflation rate has significantly dropped in recent months it is still above the European Union average of 2.1%.

Fielding also warned, that based on past experience, Irish inflation is extremely volatile and is particularly influenced by increases in the provision of the cost of public services and taxation.

He said today :"It is noticeable that both Health (6.9%) and Education (6.9%) costs are among the highest increases in the year to date and have contributed significantly to keeping Irish Inflation above the EU average.

"The anticipated increase in healthcare costs announced in the book of estimates today, primarily to pay for benchmarking, will not help the situation.

"Introducing further inflationary pressures into the economy through indirect taxation and other stealth taxes would prevent us from reaching the achievable goal of getting inflation below the EU average," Fielding concluded.