The number of people sent to prison for failing to pay fines rose by 10% last year.
Some 8,304 individuals were imprisoned in 2012 for not paying court-ordered fines - up from 7,514 the year before.
New figures from the Prison Service showed this represented a large portion of the total number of people sent to jail throughout the year, which stood at 13,860.
Justice minister Alan Shatter said it was disappointing to see so many people jailed for minor offences such as fines.
"These figures alone show that we are out of kilter with Europe and other parts of the world," he said.
"It is clear that too many offenders serve short sentences of three months or less, which is neither of benefit to the state or to victims of crime nor act as a deterrent to reoffending.
"I am strongly of the view that we need to keep the numbers of people committed to prison for the non-payment of fines to the absolute minimum. We have already legislated to require judges to take a person's financial circumstances into account when setting a fine."
Mr Shatter said he expects to publish the Fines (Amendment) Bill this term to make it easier for people to pay a fine and give the courts options to deal with those offenders.
The annual report also revealed a hike in the number of people jailed for less than three months - from 8,070 in 2011 to 8,837 last year.