Dáil Éireann debate -
Tuesday, 12 Oct 1993

Vol. 434 No. 4

Written Answers. - Farmers' Tax Free Allowances.

John O'Leary

Question:

60 Mr. O'Leary asked the Minister for Finance if he will allocate more generous tax free allowances to farmers to encourage them to improve production in view of the fact that farmers work extraordinarily long hours throughout the entire calendar year; and if he will make a statement on the matter.

Minister for Finance (Mr. B. Ahern)

I would like to point out that the farmers are not the only group or people in this country who can be said to work extraordinarily long hours throughout the year. Many groups within the self-employed and the PAYE sectors work long hours, while others have to work unsociable hours.

With regard to the question of encouraging an improvement in production among the farming community, the operation of the Common Agricultural Policy in Ireland together with spending in the agricultural sector under the National Development Plan provide various supports to Irish farmers.

On the question of allocating more generous tax allowances to farmers, I might point out that the farming community is already in receipt of several tax reliefs that would not be available to other sectors of the community. For example, farmers can claim stock relief which allows 25 per cent of the cost of increases in the value of stock to be written off against trading profits. There is no clawback of the relief if stock levels drop. Farming is the only trade to which stock relief applies. Farmers can also claim capital allowances in respect of expenditure on the construction of farm buildings (excluding a building or part of a building used as a dwelling), fences, roadways, holding yards, drains or land reclamation. These can be written off at 10 per cent per annum, which is a higher level of relief than that available in respect of industrial buildings, for example, where the capital cost can be written off at 4 per cent per annum over 25 years. In addition, a farmer may also choose to avail of income averaging, where the income for tax purposes is assumed to be the average annual income for the past three years.

In addition, I should point out that any additional tax reliefs accorded to any particular sector or group would have to be met by increased taxation in other areas or by cuts in public expenditure or both. By curtailing various allowances and concessions over recent years, the Government has successfully reduced rates of income tax, an achievement which has benefited the whole community. In view of the current level of allowances available to farmers which are not available to other sectors, and the various supports for Irish farmers provided by the Common Agricultural Policy and the National Development Plan, there does not appear to be a case for more generous tax allowances for farmers to encourage production.