The Minister for Finance has given his clearest indication yet that he will cut the top rate of tax in the upcoming Budget.

Speaking in the Dail last night, Mr McCreevy indicated that he will cut the top rate of 46 per cent in his upcoming Budget on December 1st.

The Minister also repeated that the Government will also reduce the standard tax rate, ensure more people pay tax at onto the standard rate and keep more of the low paid out of the tax net altogether.

These measures would be achieved through widening bands and increasing allowances.

"As far as the Government is concerned the option of cutting income tax rates remains on the agenda," he said. He added that the top income tax rate influences work incentives and labour supply in certain important areas.

The Minister also ruled out introducing an intermediate rate of tax. Mr McCreevy also promised action on capital acquisitions tax and childcare but did not give any indication how far he is likely to go with either measure. There are concerns that anomalies with orphans and adoptees could be left in the CAT legislation after Budget day.