McCreevy refuses to go down high tax road

Finance Minister Charlie McCreevy has said today that he believed high tax rates cost jobs "sooner rather than later" and that "he is not going to go down that road".

Despite some lobbying to increase the tax rates he said they would remain the same.

The employee tax credit rises by €240 to €1,040 a year, removing 39,200 people from the tax net.

Exemption limits for those aged 65 or over are also being increased by €500 for single people and €100 for married.

In keeping with the Minister's social inclusion aims, tax will not be payable on 90% of income for those earning the minimum wage.

The Minister said that low inflation is a priority and announced little change in indirect taxes as a result.

From midnight tonight excise duty on a packet of 20 cigarettes goes up by 25 cent, while the rate on petrol and diesel will be increased by 5c per litre.

The Minister said that these increases will raise €243m next year, adding less than 0.4% to the Consumer Price Index and so not threatening inflation.