The Minister for Finance, Mr McCreevy, has rejected demands by charities for changes to the VAT rules, which cost them €63 million.
Under the Charities Act, charities are exempt from most forms of taxation and rates, but they are unable to claim back VAT as for-profit companies are able to do.
Pushing for change, Ms Deirdre Mortell, of Barnardos and chairperson of the Irish Charities Tax Reform Group (ICTRG), said the public was unaware of the level of VAT paid.
"Some charities will give virtually all the money they generate from fund-raising to the Government as part of ongoing VAT returns. For some charities this is a crippling experience," she said.
Yesterday, Mr McCreevy ruled out concessions, which he said could not be granted under European Union rules.
"Under the Sixth EU VAT directive we could keep all exemptions that we had prior to 1991, but nothing more. You could operate a grants system, but no minister for finance has done more for the charities than I have.
"The changes that I brought in will live on long after. I saw the US model, where $190 billion a year is donated. I grouped all the reliefs together so that donors can write them off against tax. It is a change that will long outlive my time as Minister for Finance."
Asked if he would consider making grants to charities to compensate them for the VAT bill, Mr McCreevy said: "I am not going to make up policy on the hoof."
However, the charities argue that while the Government is obliged to collect VAT under EU rules, it is not obliged to keep it. "There are precedents for this . . . They could give it back," said Ms Mortell.
The charities acknowledged the help offered by successive governments: "However we now believe the VAT issue must be addressed by the incoming Government."
Members of the public are asked to log on to a website at www.vatcampaign.com and send e-mails to public representatives from all parties in support of the campaign.
The ICTRG represents 95 of Ireland's leading domestic and overseas charities and voluntary groups.
The list includes the Irish Cancer Society, Rehab, Concern, Trócaire, Barnardos, Central Remedial Clinic, St Vincent de Paul, Enable Ireland, Cheshire Homes, the Hospice Movement and the Simon Community.
