Tánaiste Micheál Martin has confirmed that the Government is examining a possible cut to the Universal Social Charge.
Mr Martin has said the move is "under consideration" although he added that there are limits to what can be done in this Budget.
It is understood that Fianna Fáil is pushing for the measure in order to impact all earners especially those on lower incomes.
The Universal Social Charge was introduced in December 2010 at the height of the financial crash.
It applies to all earnings for those receiving a gross income of over €13,000.
Fine Gael's priority on the income tax side is to push for a further increase to the point where people pay the higher rate of tax.
This would benefit middle and higher-income earners.
Sources in both parties have indicated that both moves are under consideration in the Budget and that both are possible within the parameters set out in the Summer Economic Statement.
It is expected that the tax bands and credits will increase again as that was promised in the Programme for Government.
Mr Martin’s comments were reported in the Business Post newspaper.
Final decisions have not yet been made ahead of this year’s Budget on 10 October.
