Yes, to do that:

  1. Go to the Settings > Speech.
  2. Then select Play audio confirmations option to On.
  3. Tap Read aloud incoming text messages, and then choose when you want to hear the announcements - all the time, or only when using a Bluetooth and/or a wired headset.
  4. Windows Phone 8: Select Speech language and follow the on-screen instructions to download a speech support package.
  5. When your phone announces an incoming text, you can say "Read it" or "Ignore." Then you can dictate and send a reply.

The text message reader will not work on silent mode. If you want to stop this option, tap Read aloud incoming text messages and select Off.

Note: Speech may not be available in your country or region.