Farm Ireland

Wednesday 22 November 2017

Poultry taxation issues are beyond department's remit - Minister Creed

Independent Senator Ronan Mullen
Independent Senator Ronan Mullen
Darragh McCullough

Darragh McCullough

The Minister for Agriculture, Michael Creed, has claimed that his department would be 'overwhelmed' if it tried to sort out farmers' allegations of tax abuses by processors.

His comments follow a request by Senator Ronan Mullen for the Minister to intervene in a case raised by Cavan poultry farmer Alo Mohan about alleged tax abuses in his sector.

Minister Creed went on to say that the Competition Authority also restricted the role that the department of agriculture could play.

"The Competition Authority has made it abundantly clear to us that we have no role to play, with regard to the arrangements that exist between farmers who are constantly in difficulties with the meat processing plants," he said.

The poultry sector has been rocked by a complaint to the EU Commission from Cavan poultry farmer and former IFA poultry chairman Alo Mohan and Irish MEP Marian Harkin about VAT arrangements.

"Right now, the Irish Revenue are carrying out an examination and review of the flat rate scheme for farmers and other players in the poultry sector," Marian Harkin told the European Parliament last week.

"The European Commission is also investigating the matter on foot of a complaint I and a colleague submitted, particularly in respect to Sicín Co-op and the processors, Carton Brothers.

"The Irish Revenue has said in a response to the Commission that Ireland is aware that there is a risk that manipulation of the price of feed sold by the processor to the co-op and then onto the members of the co-op could artificially increase the consideration charged by the member to the co-op for his rearing services...thereby increasing the amount of the flat-rate addition in respect of the rearing services.

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"In my view, when the price of feed is artificially increased, it increases the price of flesh and artificially increases the amount of flat rate VAT that can be claimed back.

"This basically means that it is taken out of the amount of VAT paid by ordinary citizens on their purchases and by businesses who do not have specific arrangements- we are all the poorer for it," added Ms Harkin.

Speaking in the senate, Mr Mullen said there was a "need for the Department of Agriculture, Food and the Marine to be extremely vigilant about whether there is any unfolding scandal here of an abuse of power in the poultry industry."

"A processor, such as Carton Brothers Manor Farm, is entitled to source produce from whomever it likes, but if there is a question of a supplier getting penalised because he took the route of good citizenship, then an important public issue arises.

"That is the issue I want the Minister to address. We cannot stand back and say it is a private arrangement between a processor and a supplier," he said.

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