High earners who have availed of tax incentive schemes are set to pay more tax next year, with the effective or minimum tax rate which applies to such people being increased to 30 per cent from 20 per cent.
Minister for Finance Brian Lenihan said the new measure, to apply for the 2010 tax year, will yield approximately €55 million.
He also said the entry point for the restriction will now occur at €125,000 with full restriction applying at €400,000.
"I will examine the curtailment and removal of further reliefs in the context of the Finance Bill," Mr Lenihan told the Dáil.
There were no increases in income tax announced. He said the tax increases introduced in his last two budgets had placed the heaviest burden on those best able to pay. A single person on €25,000 paid an extra €500 in tax and levies, while a person on €250,000 paid nearly €17,000.
"The progressivity of the recent changes is beyond doubt. But we have reached the limit. We will not create jobs by increasing the penalty on work and investment."
He said he would introduce a new system in 2011 in which there would be just two charges on income: tax; and a social contribution replacing the current health, PRSI and income levies.
He also said there must be change to the way almost half of income earners pay no tax at all.
