Significant tax changes to increase the amount paid by higher earners and widen the tax base were discussed in the run up to the last Budget.

However, senior Government officials warned that imposing a minimum income tax rate might be counterproductive, while it warned that substantial further consideration would be needed before introducing a tax on residential property.

The Tax Strategy Group comprised senior officials from a range of departments, looked at a array of options for broadening the tax base in the run up to the December package, according to papers published on the Department of Finance website.

Part of its consideration concerned high earners and referred to a Revenue Commissioners 2002 study, which showed that 117 of the top 400 highest earners paid less than 30 per cent in tax in the 1999-2000 tax year and 51 per cent paid less than 5 per cent.

Many benefited significantly from a range of property-based tax allowances. A paper considered by the officials said one approach would be to impose a minimum income tax payment, probably in the 10-20 per cent range on incomes of €100,000 or more.

However, the officials concluded that this would be very complex to introduce and might encourage those paying a higher amount to seek to reduce their payments to the minimum. This risk of encouraging "tax planning" meant "it may not be prudent to introduce a minimum tax rate", a paper discussed by the group concluded.

Reducing or restricting tax reliefs may be a better option, it said. However the tax strategy papers give little indication of why the Minister For Fiance, Mr McCreevy, announced in the Budget the extension of the termination date for a range of property reliefs from the end of this year to the end of July 2006.

A committee paper also considered a residential property tax. It concluded that, while there may be economic or fiscal policy reasons, such a tax "could still result in adverse economic effects which could lead to distortion of the housing market". The "acceptability" of such a tax was an issue, it added.

On indirect taxes, the papers show that a fundamental overhaul of the Irish VAT regime would be required under a draft EU Commission directive. This would end zero rating on children's clothes and shoes - where the tax rate would have to rise to 21 per cent - and also abolish the 13.5 per cent rate on labour intensive services such as hairdressing, repairs and a range of tourist-related services.

However, opposition from Ireland and other states has put this draft directive on the backburner.

Significant sections of the committee's discussions were withheld, including a paper on issues of concern to the Department of Social and Family Affairs, and large sections of papers on the Special Savings Incentive Scheme.