asked the Minister for Finance if he will indicate all the sources of statistical information that prompted him to raise the production value of £1 valuation of land from a notional one of £40 to £65.
Ceisteanna—Questions. Oral Answers. - Land Valuation.
16.
As I indicated in my recent financial statement, the multiplier is being raised from 40 to 65, although a full-value multiplier on a national basis arising from farm incomes in 1976 would be around 80.
The principal source of information on farm incomes is the Central Statistics Office. The most recent available statistics for income arising in agriculture are those for 1975 prepared by that office and published in table 9 of the June, 1976 issue of the Irish Statistical Bulletin. The figure given in that table for “Income from self-employment and other trading income” is net of expenses related to farming, including rates on land. For the Economic Background to the Budget, 1977 it was estimated by my Department, in consultation with the Central Statistics Office, that farmers' incomes increased by 10 to 15 per cent in 1976 over 1975.
Having regard to the allowances not being granted this year, will the Minister not agree that the multiplier figure is more likely to be from 40 to 90 rather than from 40 to 65?
For 1977 the figure is over 100. The figure of 80 which I quoted is based on 1976 figures but, having regard to the estimated increases in 1977, the figure would be over 80.
Will the Minister not agree that it gives a false impression to say the figure has increased from 40 to 65? It has actually gone from 40 to over 90 when all the allowances that were available before the budget and are not available now are taken into account.
If the allowances to which the Deputy refers were to be reinstated, it would mean a multiplier of 82 for 1976. I am not aware of any substantial lobby in favour of having a multiplier of 82 and a restoration of the allowances which previously existed. Several organisations asked for a simpler multiplier than the one which operated from 1974 onwards. They wished to have a multiplier which would not involve keeping accounts and records, which was involved if all the deductions which were previously allowed were to continue to be allowed. The resulting system is a much simpler one and is a fair one having regard to the very substantial increase in net farming incomes between 1974 and 1977.
Would the Minister not agree as regards the multiplier, the notional figure and farming taxation that the farmer pays a larger amount of indirect taxation than people in other walks of life? I am not saying the farmer should not pay taxes. A man in any other walk of life earning £4,000 may pay taxation on his car but he does not pay it on the implements which help to make his income as a farmer does, such as the money he pays in VAT.
As the Deputy knows, it is open to any farmer to register for VAT and by so doing to get a refund of any VAT paid by him on his inputs. Some have done it but most have not. That right exists.
Question No. 17.
Is the Minister saying——
A brief question, Deputy. I want to deal with other questions.
Is the Minister saying that any VAT paid by a farmer in replacing machinery can be claimed under the notional figure?
If the person is registered for VAT purposes he can get a refund under the VAT regime. In regard to the notional system it must be remembered that this is not available to any other section of the community. No other section in the community is given a choice of taxation systems. Nobody else is given an opportunity to elect between paying one sum and another. One must balance all these things to arrive at a conclusion as to whether or not what has been offered is a fair system.
The Minister misunderstood my last question.
I understood it well.