Tax proposal would undermine farming

A PROPOSAL by the Commission on Taxation to cut Capital Acquisitions Tax

thresholds will undermine the future of a competitive agri-food industry,

according to IFA President Padraig Walshe.

“This could result from the transfer of farms from one generation to the next being discouraged by the revised thresholds”, he said.

“I am also very concerned that the carbon tax is just another cost to the productive, export-driven sectors of the economy and will also discriminate against farmers and rural dwellers who do not have the option of public transport”, he added.

“This tax should not be introduced until the uncompetitive elements of our economy are addressed by the Government and not before a similar tax is imposed on our main European and international competitors, as it would distort trade and further undermine competitiveness.

“The recommendation to change the capital allowance system will undermine any future investment in farm buildings in this country.”

Mr Walshe said that a number of proposals from IFA had been taken on board in the Commission report.

“The Income Levy introduced by the Government discriminates against farmers, and I welcome the recommendation that the levies be phased-out and that all tax on income should be through a single system - income tax.

“The recommendation that an Earned Income Tax Credit for self-employed taxpayers is a start at removing the present discrimination from the PAYE tax credit.

“Both of these recommendations must be implemented by Government in the next budget.  Also, it is vitally important for farmers subject to CPO purchases of farmland that the recommendation on restoring CGT rollover relief is implemented.”

Mr Walshe added that farmers were relieved that the proposed property tax recommendation was not to apply to business property including farm buildings, which would have been simply unaffordable to the sector.