06 Dec 2011
RETENTION OF RELIEFS AND INCENTIVES A STRONG SIGNAL FOR FARM RESTRUCTURING AND LAND MOBILITYEconomics, Farm Business & Credit
IFA President John Bryan said the taxation measures for farm transfer, investment and land mobility in today’s Budget recognised the potential of the agriculture sector to achieve the expansion and growth targets of Food Harvest 2020 and to contribute to Ireland’s economic recovery. However, the reduction in the CAT/transfer tax threshold to €250,000 is an excessive drop, and the increase to 30% in the tax rate on the balance, will impact negatively on the transfer of commercial farms.
He said, “IFA made a very strong case in advance of the Budget for the retention of supportive taxation measures to facilitate improvements in the structure of farming. With over 25% of our farmers aged over 65, we need to encourage farmers to transfer their farm within their lifetime, and not penalise the person taking over. It is crucial to have incentives to transfer land use and to promote on-farm investment. The detail in relation to the age profile for farm transfer is too restrictive and this issue must be addressed prior in the Finance Bill.”
Mr Bryan said, “The decision to reduce the commercial stamp duty rates will also help to stimulate activity in the land market, encourage lifetime transfers, and allow farmers who wish to expand, to do so.”
The IFA President said the increases in fuel and motor taxes and the increased VAT rate would have a significant impact on farm business costs, while the household charge is an additional cost for all farm families. “At a time when input costs are rising, these extra bills will take further money out of farmers’ pockets.” He said the abolition of the Universal Social Charge for incomes under €10,000 is a welcome move.
Mr Bryan said the decision to increase the carbon tax would further increase production costs and reduce the competitiveness of the sector, and more clarity is required as all farmers must get full relief on the carbon tax as promised in the Programme for Government.