In its submission to the Minister for Finance on the Finance Bill 2011, IFA has highlighted outstanding farming taxation issues that were not addressed in the Budget. The key issues outlined in the submission are the:
Extension of taxation reliefs for farm consolidation and indigenous bio-energy production;
Exclusion of agricultural buildings or zoned land in use as farmland from the Site Valuation Tax; and
Removal of tax discrimination for primary producers selling direct through vending machines.
IFA Farm Business Chairman, James Kane, stated, “Farm fragmentation is a key structural issue for Irish farming. The purpose of stamp duty relief for farm consolidation is to incentivise farmers to reduce the number of parcels of land in their farm or to reduce the distance between these, improving efficiency and profitability. The relief must be continued past the current deadline of 30 June 2011. This is of particular relevance as the cost of farmland has returned to more affordable levels and farmers may be in a position to invest in their farm.”
Mr Kane continued, “While the Site Valuation Tax, due to be introduced in 2012, will not be levied on agricultural land, it is vital that agricultural buildings of any type or zoned land where the farmer continues in farming are also excluded from the tax.”
The submission contains a proposal to amend the existing VAT legislation to allow zero-rated foodstuffs sold through a vending machine to remain-zero rated for VAT. This would ensure that farmers, who have diversified businesses by selling certain basic foodstuffs to consumers through vending machines, are not placed at a cost disadvantage to their competitors selling the same product on the retail shelf.
IFA has also proposed the extension of the Mineral Oil Tax Relief (MOTR) for biofuels for indigenous producers to 31st December 2011 to allow full utilisation of the reliefs allocated under the scheme. Extending the MOTR for indigenous producers will help to safeguard Ireland’s fledgling biofuels sector, and position Ireland to benefit from high potential second-generation biofuels.
Mr Kane concluded, “IFA has sought a meeting with the Department of Finance to discuss these important issues in advance of the publication of the Finance Bill.”