Finance Minister Michael Noonan has refused to rule out hiking the price of cigarettes in next month's Budget.
Minister Noonan said that if he was to raise extra tax, he would then have more scope for spending increases or further tax cuts in other areas.
He also said that the Budget is likely to include new measures to kickstart the construction of family homes.
Minister Noonan said that an increase in cigarette prices would probably be the only tax he would raise.
"We're not really minded to do a lot of tax increases," he said.
"We think people have had enough of tax impositions on them, but we may raise some taxes.
"Obviously on health grounds there's always an interest on raising duty on tobacco for example, so we won't rule that out completely."