TOURISTS from China and India are the main targets as part of the country's first formal visa waiver programme.

The new proposal was announced today as part of the Government's jobs initiative aimed at stimulating the employment sector.

The Government is hoping the waiver scheme will lure visitors attending the 2012 Olympics in London to Ireland as well.

Justice Minister Alan Shatter gave details of the programme today following intensive consultation by his department with tourism industry representatives.

In all, the temporary waiver will be targeted at short-stay visitors of 14 nationalities.

Normally, these visitors would have to apply for separate visas to enter both the UK and Ireland.

However, between July 2011 and October 2012, Ireland will allow visitors with a UK visa to also enter Ireland.

Despite widespread praise for the initiative, ministers have been forced to defend their decision to impose a levy on private pensions to finance the jobs initiative.

Key measures in the jobs plan include a reduction in VAT to 9pc on tourism-related activities and a reduction in employers' PRSI.

The Government will also implement new infrastructural spending on roads and schools and to create almost 21,000 positions for training and internships. The internship programme, aimed at providing 5,000 places, will give participants €50 a week on top of their dole payments.

There has been strong criticism of how the plan will be paid for -- through a 0.6pc levy on pension funds, raising €470m a year over four years.

Fianna Fail spokesman Willie O'Dea described the pension fund levy as "the biggest smash-and-grab raid since Nero got rid of Rome to build a pad for himself".

His party colleague, Michael McGrath, said today that the impact of the initiative would be modest.

"They built up expectations to such an extent that it was impossible to deliver and while we do welcome the positive initiatives in yesterday's announcement... I think the impact will be quite modest," the Fianna Fail spokesman on public expenditure said.

Complaints

The Irish Association of Pension Funds described the proposed levy on private pensions as grossly inequitable.

And the Pensions Ombudsman said he expects to be inundated with complaints over the proposed charge.

But Minister for Finance Michael Noonan said the reaction was "quasi-hysterical".

Mr Noonan said the Government was "pulling back a very small proportion" of the tax relief enjoyed by the pension industry over the years.

He insisted the jobs initiative would help to rebuild confidence because it showed the Government has a vision of what it wanted to achieve.

Mr Noonan also reaffirmed the Government's commitment to retaining the 12.5pc corporation tax rate.

He pinpointed the visitor sector as vital for job creation and announced the rate of VAT is to be reduced from 13.5pc to 9pc to boost the tourism industry.

The lower rate will come into effect on July 1 and will apply until the end of 2013.

It will apply to hotels, restaurants, visitor attractions, cinemas, theatres, amusement parks and a range of other goods and services.

comurphy@herald.ie

- Cormac Murphy