He then made it clear that increasing the current top tax rate from €42,000 to €50,000 would not be achieved in a single budget.

In his final comments on the possible shape of the October Budget, the Taoiseach said he hoped the Government would make further progress on raising the tax thresholds.

The Fine Gael leader suggested further reductions in USC rates and also considering measures on inheritance tax.

“We have indications in the Summer Economic Statement that we have around €1.4 billion available for tax measures, which is almost exactly the same as last year, so that gives an indication of the scale of the options available to the government,” he said.

“It’s important to me that you don’t get into a situation where someone’s pay goes up, or someone works a few hours of overtime, or you know, gets a promotion, and then all of a sudden they find that the state is taking more and more of their money back. That’s a disincentive to the principle of making work pay.

We have made consistent progress in raising those income bands, and I hope we can do that again.

“Issues around the USC are also terribly important. And can we make progress there?

“Problems around inheritance tax losses. There are many things in the pot to consider.

“I also said at the ASD that my party would be outlining, from a party point of view, our own tax strategy for the next five years later this year and I think it is also important that people know the direction that my party and I would like to see tax policy take in the coming years.”

The upcoming budget amounts to €8.3 billion, consisting of a spending package of €6.9 billion and a tax package worth €1.4 billion.

The budget will be officially presented on October 1.