Wealthier people will have to pay the most when it comes to tax changes in the forthcoming budget, Minister for Finance Brian Lenihan said today.
The Minister declined to comment on specific details of the April 7th budget, but said "fairness and equity" were very important in taxation matters.
"Those who have most to pay, must pay most. But everybody must contribute something. That's my policy in relation to taxation."
Speaking on RTE's Morning Irelandprogramme, Mr Lenihan said the Government had to "draw a balance" between protecting jobs and the economy, and ensuring that Ireland's solvency and our position in relation to borrowing was "credible".
"The key operation in this budget is that we cannot continue chasing a downward cycle. We have to stabilise the finances and show a credible way forward for the country, out of our economic difficulties and that's what we'll be doing."
"I cannot announce in advance of the budget exactly what our taxation position will be, but it's clear that there's been a very big drop in our tax receipts in the past two years. It's gone from €48 billion in 2007 to €41.5 billion last year and we estimate it could be as low as €33b billion this year.
"So when you look at all of those figures, you can see there has been a very big drop in our tax base. That¿s not sustainable. So to be credible and to manage our finances in a credible way, there will have to be an increase in the burden of taxation. But the Government has to balance that against the requirments of the economy."
Mr Lenihan also declined to give specific figures on whether the State was likely to exceed the figure of 9.5 per cent of GDP in its borrowings this year and said "a lot of figures and percentage targets" had been mentioned.
He said there had been slippage in the economy this year, and it appeared that we would be down some 6.5 per cent in our national wealth.
"The Government has to fashion a budget that protects that economy and that at the same time establishes that we have a credible way forward in the management of our public finances."
Asked whether he would bring an end to tax breaks for the wealthy, Mr Lenihan said: "There's been a considerable phasing out of tax breaks in recent years and we will continue to phase them out.
"But I do have to say in relation to tax breaks, that some of the sums that have been mentioned that can be saved out of the abolition of tax breaks are optimistic."
Mr Lenihan urged the Opposition to be "constructive" in putting forward ideas to help get the country out of its current economic difficulty.
Responding to a row with Labour Party finance spokeswoman Joan Burton in the Dáil last night, Mr Lenihan said he had been "pilloried" by the deputy [in her accusation of "a bailout of your friends in the banks"].
"She accused me of corruption in the House last night. She shouldn't say things like that in the House, but look, this shouldn't distract us from the important things that are there in the economy at present."
Mr Lenihan said Ms Burton and Fine Gael finance spokesman Richard Bruton had in recent weeks been accommodated by Department of Finance officials so they could view the figures available, in line with convention and subject to issues of Government confidentiality.
"I think it's important we play a constructive part in working on our problems together. But it's not constructive to make allegations on the floor of the House about corruption or alleging or imputing corruption to the Taoiseach or myself. We act on the advice of officials. We don't act on that basis - that has not been my record [in] public life and I don't see why I should have to go into the House and listen to that."
The Minister accepted the Opposition had a duty to be vigilant and to hold the Government to account.
But he added: "We must have criticism about our banking system and what has happened, because what has happened is a disgrace. But at the same time we must be careful about our language, because it is beamed around the world and picked up by commentators in other countries."
Speaking earlier on the same programme, Ms Burton said the Minister for Finance had privately thanked her "over and over again" for "speaking frankly" in relation to the economy and that he "personally agreed" with much of her analysis.
But she said Taoiseach Brian Cowen had made "fatal decisions" in encouraging certain market practices when he was Minister for Finance which in turn had resulted in the collapse of the property market and pension funds.
She welcomed the cancellation of a proposed day of strike action by unions next Monday, but said workers "have absolutely understandable grievances about what they are having to carry the can for".
In relation to the budget, Ms Burton said the critical thing on April 7th was for the Government to set forward a framework of recovery for the next four to five years, as required legally by the European Union.