The Finance Minister has stood by promises of major tax cuts in the coming budget.
Fine Gael has committed to raising the point at which people pay the higher rate of tax to €50,000.
The measure would cost billions over the next five years.
Despite warnings from spending watchdogs to be prudent with the public purse, Minister Paschal Donohoe is sticking by the tax cut pledge.
He said: "It is the Governments position however that workers pay too high a rate of income tax at too low an income level.
"We cannot hope to remain competitive if someone on a relatively low income and who decides to work a few hours overtime, has nearly half that extra money taken in tax."