The Finance Minister Michael Noonan says the budget adjustment will be "somewhat less" than €2bn originally planned. The comments come as the Exchequer figures for July show the tax take is up on last year and ahead of target.
The four main tax headings all recorded growth last month.
Since the start of the year over €22.3bn in tax has been generated for the Exchequer.
The figure is 6.4% or more than €1.3bn up on the same period last year - and 2.5% or over €500m ahead of target.
Tax take in July alone was 9% or just over €300m above the monthly target.
The returns show increases in three of the four main headings - income tax, VAT and excise duties. While coporation tax is 1% lower.
Overspending in the Department of Health is being offset by underspends in other departments.
Mr Noonan says the latest Exchequer figures are further evidence that the recovery is taking hold across the economy.
And he says if this pattern continues in the second half of the year, the Budget spending cuts and tax hikes in October will be somewhat less than the €2bn originally planned.
