The Government will publish details of the Summer Economic Statement later today, which will set out how much money the Coalition will have for tax cuts in the Budget in October.
It is expected the room for taxation measures will be in the region of €1.5 billion.
This will be on top of capital and current spending increases of about €7bn.
The Coalition did not increase the point people pay the higher rate of tax this year.
Instead, the Government used funding in the Budget to cut the rate of VAT for the hospitality sector from 13.5% to 9% this month.
However, as wages have risen, it means many people have been paying more tax because the upper and lower tax bands had remained unadjusted.
That has led to pressure to ensure there is a personal tax package in the Budget in October.
If the Government were to simply adjust tax bands for inflation, it would be likely to cost €1.2bn to €1.3bn.
Yesterday, Tánaiste and Minister for Finance Simon Harris said the priority for the Budget must be to reward work.
At present, a single person begins to pay the higher 40% rate of tax at €44,000.
If the Government were to move that threshold by €2,000 in the Budget, it would mean a gain of €400 for those earning more than €46,000.
However, the Summer Economic Statement will not give details of tax measures.
But, it is expected that capital spending will increase by about €1.2bn next year.
That is in line with projections in the Government’s Medium Term Fiscal and Structural plan, which showed that capital spending of €19.1bn this year would increase to €20.3bn next year.
Minister for Public Expenditure and Reform Jack Chambers is expected to tell Cabinet that the additional capital spending will target homes, roads, public transport, water and energy infrastructure.
The Summer Economic Statement marks the formal beginning of the Budget 2027 process.
The Budget will be announced on 6 October.
