The Minister for Finance Brian Lenihan has told the Dáil his department now anticipates that the tax take for 2009 will be €34 billion, €3 billion short of its January estimate.
He said the new estimate amounts to a 16% drop in receipts from 2008.
However, a Department of Finance spokesperson later said that €34bn would be the tax take if no corrective action was taken, which is unlikely to be the case in next month's Budget.
He also said the Government had decided over last weekend, to restrict recruitment throughout the public sector.
Mr Lenihan also said he had seen an initial report by Dr Peter Bacon into managing risk on bank balance sheets and that the Government was considering options.
In response to a question from Fine Gael's Kieran O'Donnell, Mr Lenihan said there was no proposal to set up a toxic bank, nor was it among the options been considered by the Government.
Earlier, Taoiseach Brian Cowen has said a tax system needs to be devised that is sustainable and inclusive in order to bring balance back to public finances. The Taoiseach said he envisaged that the new system would deal quickly with the challenges of the current economic climate.
The Cabinet has been meeting today to discuss the supplementary Budget which will be introduced in two weeks' time.
Ministers held a similar preparatory meeting on Tuesday and another is expected to be held tomorrow morning. Issues such as borrowing, spending cuts and tax increases are being examined.
