The Commission on Taxation has proposed an annual tax on all residential property, water charges and the taxing of child benefit.

Read the full report from the Commission

The report is part of the Government's strategy to shore-up the public finances, with the deficit likely to exceed €20bn this year.

With Ireland facing arguably its worst financial crisis ever, the Government is under huge pressure to restore the public finances.

Step one was the McCarthy report, which recommended extensive spending cuts across the public sector, and step two is the Commission on Taxation recommendations.

The Commission stresses that its priority is to broaden the tax base rather than merely increasing tax rates.

Commission on Taxation Chairman Frank Daly said the recommendations would not damage economic growth.

He stressed that all recommendations were designed to spread the burden of taxation more evenly and to give the Government more certainty about its tax revenue.

The report urges the Government to focus on raising revenue through property taxes, spending taxes and income taxes - in that order.

The commission identified 245 tax relieving measures in the tax system.

Outline of proposals

- An annual property tax on all residential property excluding social and local authority housing

- Child benefit should be a taxable income with a tax credit to offset the increase in tax for low income earners

- A new three-rate income tax system should be introduced to replace the current high and low income tax rates

- The health levy should be abolished and integrated into income tax system when fiscal conditions improve

- Rules on residency and tax exemption should be strengthened

- Stamp duty on ATM, credit and debit cards should be phased out in the interest of promoting cash free society

- Removal of tax relief for nursing home expenses once the Fair Deal scheme ends

- The current 'Cinderella clause' needs to be supplemented with additional tests and criteria

- Additional capital gains tax should apply on windfall gains from property rezoning

- Domestic water charges should be phased in, with incentives to install meters, with a waiver for low income households

- Carbon tax based in tonnes of carbon should be introduced and collected at earliest point of supply

- VRT should be replaced over ten years by a system based on car usage

- Tax relief for pension payments should be replaced with a scheme 'along the lines of the former SSIA scheme'

- The first €200,000 of pension lump sums should be tax-free with remainder taxed at standard rate

- Ireland's low corporate tax rate should remain in place to support economic activity long term

- End to the artists' tax exemption

- Expenses of Oireachtas members should be treated as the same way as expenses paid to all other employees, with a limit placed on the dual abode allowance and an end to the flat rate of relief for accommodation.

- End stock relief for farming business but continue relief on farm land leasing

- Income tax relief for trade union subscriptions should be ended