The Tánaiste has strongly suggested that the Government will cut tax on home heating oil in the Budget.
Speaking on RTÉ's Morning Ireland, Simon Harris said that people need clarity on energy prices and that next month's Budget would aim to provide that.
The Government has two options when it comes to reducing the cost of home heating oil.
It can lower the carbon tax on kerosene, something Sinn Féin is expected to introduce legislation on in the Dáil next week.
Alternatively, it could equalise the VAT rate charged on home heating oil, which is currently 13.5%, with the 9% levied on gas.
The latter approach has been proposed by the industry group, Fuels for Ireland.
We need your consent to load this rte-player contentWe use rte-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences
Mr Harris is also expected to commit to increasing the threshold at which workers pay the higher rate of income tax in each of the next four budgets.
"I think it's really important that we recognise that there's lots of people, who are working really hard and finding that they're still just about getting by, let alone getting ahead," he said.
"It's really important that we make sure that the tax system helps them, that work always pays, that as they perhaps do a few extra hours, as their wages rise, as they do some overtime, as their career progresses, they're actually seeing the benefit of that in their own pay package.
"If we don't actually look at the fact that people in Ireland are still paying the higher rate of tax, below the average earnings in this country, we're going to continue to see this unfairness for middle income earners.
"The tax policy that this Government will pursue will be around tax bands and tax credits ... If we can continue to run the economy well, I believe we can make progress in this Budget, but also anchor income tax policy really for the next four."
Mr Harris said that everybody who pays tax will benefit from the new plans.
"Under our plan, everybody who pays tax will benefit. But we do have to be conscious that there's a pinch point of people who don't benefit from anything in the social welfare system, that they never apply for or qualify for a government grant," he said.
"Sometimes the only way you can somewhat give them a bit of breathing space is actually directly through the tax system.
"I think the bands recognising that middle income earners are still paying the higher rate of tax in this country, plus the credits, is a fair way to proceed."
We need your consent to load this rte-player contentWe use rte-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences
The Tánaiste said the income tax package would be both modest and meaningful for people, following the warning to the former by Minister for Public Expenditure, Jack Chambers.
"Both can be true. I think they can," he said.
"I think anybody who sees a tax benefit of several hundred euro, I don't think they'd see that as modest. I think they'd see that as helpful.
"I'm talking about delivering a tax package that will assist people by several hundred euro."
Tax package to be 'moderate overall'
Following the Tánaiste’s remarks about the Government committing to increasing the threshold at which people pay the higher rate of tax, Minister Chambers said that the tax package in the Budget will be "moderate overall".
Asked about the surge in the price of oil prices ahead of the Budget, Mr Chambers said the social protection system will be used to target those on lower incomes affected by higher fuel prices.
Speaking at the annual conference of the Dublin Economic Workshop in Wexford, Mr Chambers wanted to see smaller levels of increases in day-to-day spending by Government departments compared to previous years.
He said in the "next number of days" the Government would move to take action to "centralise controls" from some regions within the Health Service Executive.
"They have had very poor budgetary management, very poor financial management and have had complete lack of control in oversight the budget they have been allocated," he said.
His comments came as latest Exchequer Returns showed that the Department of Health was on track for its largest overspend in a decade.
Mr Chambers said that he and Minister for Health Jennifer Carroll MacNeill were "at one" in bringing tighter controls on spending.
He said there was a significant campaign to raise the €40,000 tax free threshold for nieces and nephews who inherit money.
He added equalising that with the €400,000 threshold for sons and daughters "would cost hundreds of millions of euro".
Read more:
Tánaiste says savings in Budget will help families
Harris says not planning to table stamp duty removal in budget
