The Chartered Accountants of Ireland says the Government’s proposed deal with unions will cost an estimated €400 – €500 million in lost taxes to the exchequer.

According to it’s Head of Taxation Brian Keegan, this seriously undervalues the desired saving of 1 to €1.3 billion from the public pay bill.

Brian Keegan of the CAI has told Breakfast that it isn’t a straight saving and the hidden cost is the loss of taxation.

“It came with a tax cut, because that levy was tax deductible itself and the tax cut (was) somewhere in the order of 400 to 500 million” he said.

“Now extrapolating that on, we’re looking at a saving in comparable amounts in terms of unpaid leave days.”

“So if you’re to….push the figures through, we’re looking at perhaps an income tax cut somewhere in the order of 400 to 500 million in our very early estimates” he added.