Finance Minister Michael Noonan has said that confidence is coming back into the Irish economy.
Minister Noonan said that sales this Christmas were up on last year's numbers, with more people out shopping and retailers reporting stronger performances.
He said that the main strategy of the last two Budgets was not to raise income tax, and that this was a driving factor behind improved consumer sentiment this Christmas.
"Well they seemed to have been significantly stronger than last year, and last year was pretty strong as well," he said.
"So I think that confidence is coming back into the economy.
"The main strategy we have had in two Budgets was not to increase income tax, so that whatever other taxes were imposed on people, people got their salaries and they had the discretion to spend them.
"I think that was the big factor."