Minister for Finance Paschal Donohoe has said a 30% rate of income tax is "technically possible" and that Budget 2023 will contain an overall personal tax package that will aim to help with the rising cost of living.

Minister Donohoe said the Government has confirmed that tax changes of over €1bn will happen, and in the coming weeks it will identify how that money can be used in the most effective way.

Speaking on RTÉ's Morning Ireland, the minister said there will also be "one-off measures in 2022" that will help with the rising cost of living during winter.

"We know people are feeling the squeeze ... we want to see how we can help with that," he said.

Mr Donohoe said the key focus is on personal taxation measures that will recognise that families and households are working hard but the "rising cost of living is biting".

"We will have a personal tax package to help with that," he said.

"What I do recognise is you enter the higher rate of income tax here in Ireland when you are on a normal or average wage and that is very different to many other economies that we compete with, or near our country, and budget by budget I have changed that."

The minister said he will identify how he can do that again.

When asked about calls to introduce Budget measures earlier, he said making any tax changes within a calendar year is hard to do as it requires every employer to change their payroll systems.

He said that as wages and income are going up, people end up paying more tax as a result of getting a wage increase if the tax levels are not changed.

"And at a time in which wages are going up we believe we should be doing what we can to help workers keep as much of the money they are earning," Minister Donohoe said.

"What we are now discussing is the different ways in which we can do it. It can either be done through for example a 30% tax rate, an alternative way it can be done is move the existing tax rates and existing credits and bands."

Minister Donohoe also said he understands why people would be calling for additional taxes on the energy sector, but he remains cautious of such a move.

He said the renewable, wind and solar sectors need to be "delivering more" energy so Ireland and Europe can be more energy independent and not face security risks that are currently an issue.

"Any sudden change in how those sectors are taxed could undermine that ability to get to that independence at a point in the future particularly when other forms of energy are being compromised," he said, adding that the focus for now needs to be on additional wind energy sources off Ireland's shores.

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Social Democrats co-leader Róisín Shortall has said there is no doubt that a large social welfare package will be needed in the upcoming Budget "because people who are dependent on social welfare payments have very much fallen behind over recent years".

Speaking on the same programme, Ms Shortall said the €15 a week increase that has been suggested should be benchmarked against wages or inflation.

"It is essential we do that," she said.

"If you're dependent on social welfare - pensioners, people dependent on disability payments, all kinds of different welfare payments - that it should be possible to survive with dignity and we need to benchmark those rates in order to do that."

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Sinn Féin's Louise O'Reilly has criticised the special tax that is available to workers in foreign companies here who earn up to €1 million, saying this is a tax relief that is not available to the average worker.

"We're talking about tax relief that's available for private school fees, for trips home. This is a form of tax relief that is not available to any other worker in this State," she told RTÉ's Today with Philip Boucher-Hayes.

She said that under the current cost-of-living crisis it would be irresponsible to propose extending this tax relief.

"I don't see any reason why a cosseted select group of workers should be picked out and given this special form of tax relief".

Ms O’Reilly said the Government needs to think hard about the consequences of extending the tax relief.

"There is nothing fair about a tax relief available to give tax special tax relief for private school fees for trips abroad.

"That's not available to any other worker in the State we are in the middle of a cost-of-living crisis and the Government need to think hard about the message that they send if they choose to extend this relief."

She acknowledged that Foreign Direct Investment is important to the economy but said this is a very specific form of tax relief "available to the ultra-rich".

She said it is about looking at the tax base and ensuring that tax is collected in a fair and equitable manner.

"I don't see any reason why a cosseted select group of workers should be picked out and given this special form of tax relief."