AGRI-TAXATION REVIEW ONCE-IN-A-GENERATION OPPORTUNITY TO DEVELOP SYSTEM THAT IS FIT FOR PURPOSE – DOWNEY

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AGRI-TAXATION REVIEW ONCE-IN-A-GENERATION OPPORTUNITY TO DEVELOP SYSTEM THAT IS FIT FOR PURPOSE - DOWNEY
27 Mar 2014

AGRI-TAXATION REVIEW ONCE-IN-A-GENERATION OPPORTUNITY TO DEVELOP SYSTEM THAT IS FIT FOR PURPOSE – DOWNEY

Economics, Farm Business & Credit

 

IFA President Eddie Downey has said that the review of farm taxation by the Departments of Finance and Agriculture presents a once-in-a-generation opportunity to develop a taxation system that both recognises the unique challenges of Irish farming and supports its ambitious targets for growth.

Mr Downey said, “This review coincides with the expansion plan Food Harvest 2020 and in advance of the abolition of milk quota. It is a timely opportunity to assess the role the taxation system is playing in supporting the achievement of economic and social goals for Irish agriculture”.

 

These include promoting on-farm investment, encouraging new entrants to farming and greater numbers of lifetime transfers, increasing land mobility, and improving the overall structure, efficiency and productive capacity of agriculture. Eddie Downey said the achievement of these goals will result in an increase in output, employment and exports and contribute to a more regionally-balanced economic recovery.

 

He continued, “A comprehensive review of the taxation system for farming requires an understanding of the current market and policy environment facing Irish agriculture and the key characteristics of the sector. In addition, in considering new and existing taxation measures, the economic gain arising from the achievement of growth at farm level, must be taken into account”.

 

IFA’s submission focuses on the existing main tax reliefs relevant to farming and whether they can be adapted to work more effectively, whilst also proposing a number of new measures to address particular problems in the sector.

 

Specific proposals outlined in the IFA submission include:

  • Addressing the disincentives for investment that exist in the current income tax system and adjusting the system to support farmers to achieve the growth objectives of Food Harvest 2020. This includes expanded Capital Allowances and Stock Relief;
  • In addition, proposals are outlined on measures that are necessary to address growing volatility of farm incomes, including a new mechanism for income averaging through a Tax Deposit Account (TDA);

                                                                                                          

  • Specific recommendations to improve the uptake of land mobility and transfer initiatives, including an innovative proposal of a model for encouraging greater and earlier lifetime transfers through a Phased Transfer Partnership’ (PTP);
  • The extension of existing measures that support farm partnerships, the need for a simplified system for Income Tax Returns for farming, opposition to any change to the Pay & File deadline, and a number of sector-specific proposals, including measures to secure additional capital for investment in the expansion of the dairy industry post-quota.

 

 

 

 

 

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