Addressing the IFA Executive Council meeting today (Fri), which was attended by the Minister for Finance Michael Noonan, IFA President Eddie Downey recognised the support of Minister Noonan, and that of Minister for Public Expenditure Brendan Howlin and the Government, in providing strong national funding for the Rural Development Programme 2014-2020.
“A well-funded Rural Development Programme is an investment in rural Ireland, in agriculture, Ireland’s largest indigenous industry, and in growing the 300,000 jobs and €10b in food exports which the agri-food sector sustains.”
Eddie Downey said the current review of agri-taxation measures, which was announced in Budget 2014, will have to take full account of the expansion plans in the agricultural sector.
He said, “Farmers are gearing up to spend over up to €2bn on their farm enterprises over a short period of time which will drive growth in employment and export earnings. However, this is going to put huge pressure on farm cashflows and IFA will be pushing for increased stock relief measures and accelerated capital allowances to allow farmers expand in a viable way”.
Eddie Downey said huge income volatility has become an increasing threat to farm family viability in recent years. He said, “A combination of extreme weather events and unpredictable global price trends has caused huge variations in what farmers earn from one year to the next. We will be proposing that taxation tools such as income averaging will have to become much more flexible to take account of the volatile nature of farm income”.
The IFA President will also highlight the importance of land mobility and restructuring, with a particular emphasis on ensuring that farm business transfer to the younger generation and land leasing are encouraged. Eddie Downey said the retention of the agricultural relief is vital to encourage the orderly transfer of farms, and the CAT exemption thresholds will have to be re-examined in the context of rising farm asset values. At a minimum CPI indexation will have to apply to all assets subject to capital taxes.
He said, “Competitiveness remains a key issue for farm families. The Government must do more to drive down the cost of doing business in Ireland and ensure that indirect taxes are not increased further”.
IFA will be taking the opportunity in this Review to make proposals on how compliance costs can be reduced. There has to be a simplification of tax returns for many small and medium sized farmers, whose turnover and net income does not justify high compliance costs.