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Thursday 18 September 2014

€100m in farming tax breaks 'under review'

Published 12/02/2014 | 02:30

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Simon Coveney: wants to see ‘what works and what doesn’t’. Photo: Damien Eagers
Simon Coveney: wants to see ‘what works and what doesn’t’. Photo: Damien Eagers

FARMERS get more than €100m a year in tax breaks – but the Department of Finance is now going to examine them to see if they're worth it.

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It said the intention was not to cut the total amount of tax relief available to farmers, but to make sure the different measures were being targeted correctly. They are aimed at goals such as encouraging more land transfers and handovers to younger farmers.

Department of Finance officials admitted that they did not know the exact value of tax reliefs to the farming sector, but said they were very significant.

"It's very substantial, it's certainly in excess of €100m a year," a senior official said at a department briefing, announcing a public consultation for its review of farming tax incentives.

It was difficult to pull out the exact figures because some tax reliefs were also available to non-farmers, and there was not the level of detail on tax forms to break this down fully, he said.

"One of the aims of the review is to get a really clear picture of what the level of support is and where it is working and where it is not," he said.

Finance Minister Michael Noonan had announced this cost-benefit analysis of agri tax breaks in the last Budget, and the aim was to take a systematic look at measures that had grown up in a piecemeal way over the years.

BENEFITS

Agriculture Minister Simon Coveney said that the aim of the review was to identify what worked and what didn't and redirect tax expenditure towards activities of maximum benefit to agriculture.

Any recommendations coming out of the review and cost-benefit analysis would be considered in the next Budget, he said. The agriculture sector employs about 167,000 people in total all around the country, with a total annual turnover of €26bn and exports of €10bn, while the average income last year was €25,500.

The Government's Food Harvest 2020 goal is to increase exports to €12bn by 2020, with significant increases in milk and beef output in particular.

The Department of Finance wants to look at how tax measures can help achieve these targets by encouraging young farmers and new entrants by making it easier to access land.

Currently less than 0.5pc of farmland changes hands every year, and there is a strong attachment to holding on to it, so the department wants to see what measures work best to encourage more land mobility.

It also wants to encourage more consolidation of land holdings as currently most farms have several fragmented parcels of land.

It said that uptake on some schemes had been disappointing and it wants to see if there was good awareness of the tax breaks available.

Farming tax breaks include stamp duty relief and stock relief for young trained farmers and retirement relief on land transfers, which are targeted to encourage older farmers to hand over the farm by age 70.

Irish Independent

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