Budget windfall for forestry as 'unfair' tax regime to go
Farmer with forestry plantations will benefit under new tax break measures in the Budget to encourage more woodland planting, the Farming Independent has learned.
The Coalition's attempt to create a more 'equitable' taxation system for farmers and the self-employed will see tax measures currently available to other agriculture sectors made available to the forestry industry.
Under measures expected to be unveiled in next month's Budget, forestry owners will be able to average income earned over five years.
Department of Agriculture sources admitted there has been an "unfairness" in how the forestry industry is taxed.
"If you have a bad year and a really good year, presently in all other sectors of agriculture, you can average your income out so you can pay an average amount of tax every year rather than a big loss when you might have it spent," a source said.
The move comes as the government is trying to make forestry more attractive and create 'carbon sinks' in a drive to meet our climate change commitments.
It is hoped the changes to the taxation system will benefit forest owners who may face hefty tax bills after waiting for 35 years to fell trees.
Agriculture tax consultant Martin O'Sullivan said the main issue facing the forestry sector is the income threshold as earnings from forests will generally be earned in one year.