IFA Welcomes Removal of High Earner Restriction and Return to Income Tax Free Status for Forestry Income
IFA Farm Forestry Chairman, Michael Fleming has welcomed the removal of the Higher Earners Restriction and the return to an income tax free status for forestry income for farmers. He said this is a very positive development for the forest sector, and will allow farmers to manage harvesting operations more efficiently and not be limited by a tax threshold.
“I would like to commend Minister Hayes for listening to IFA’s concerns that income from clearfell – a once off payment at the end of up to 40 years growing cycle – should not be treated in the same manner as other income captured under the higher earner restriction”, said Mr. Fleming. “The change recognises that the income generated at clearfell must support a farmer during subsequent rotations”.
“The forest sector is a €2.2 billion industry, that employs nearly 12,000 people with enormous growth potential”, said Mr. Fleming. “Ambitious targets have been forecast for the private sector, with production in privately owned forests to increase eightfold to nearly 3 million m3 by 2028.
Mr. Fleming said that the changes in the budget will encourage timber mobilisation and more importantly improve supply chain efficiency as the size of the felling coup is no longer limited by tax liabilities. He said that there are a lot of private plantations that are ready to be thinned and some nearing clearfell stage.
“Ireland is currently importing 30% of processing sectors sawlog requirements from Scotland”, said Mr. Fleming, “I look forward to seeing more of this demand being met by the private sector now that the tax barrier to mobilisation has been removed”.