Dáil Éireann debate -
Wednesday, 1 Feb 1995

Vol. 448 No. 4

Written Answers. - Farmers' Tax Returns.

Liam Aylward

Question:

84 Mr. Aylward asked the Minister for Finance if he will introduce a system in the 1995 budget for making returns for tax compliance which farmers can use without requiring professional assistance and which would have no cost; if such a system would be extended to the maximum possible number of farmers; and if he will make a statement on the matter. [2223/95]

Minister for Finance (Mr. Quinn)

It has been longstanding Government policy that farmers should be assessed to tax in the same manner as other taxpayers, i.e. on their actual income in all cases.

The farm profile is a simplified return of income specially designed for farmers to enable them to make returns without the need to produce full farm accounts thus ensuring a lower compliance cost to the farmer. A commitment was given in theProgramme for Competitiveness and Works (PCW) to hold discussions between the Government and the farm organisations to examine the operation of the existing system of farm taxation, including the farm profile system. The examination was to “take account of the views of the farm organisations that the farm profile should be capable of being completed without professional assistance and that it should be extended to the maximum possible number of farmers”.

Discussions have been ongoing over the past year with the farm organisation with regard to this commitment. The Revenue Commissioners have indicated that they will continue to make a concerned effort to inform farmers about the availability and advantages of using the farm profile system.

Furthermore, low income farmers can be excluded from return-filling altogether by completing the farm profile— basic form which is a screening device used to help identify famers whose level of activity is so small that they are unlikely to have a tax liability in the current tax year and in future years. Where an inspector of taxes decides that the level of activity of a farmer is unlikely to result in a tax liability the farmer will be advised that a return of income will not be required for that particular tax year of later years unless circumstances change. Farmers who are so advised will, however, be subject to periodic reviews by the inspector of taxes.

In addition it must be remembered that the choice of accounting system remains a voluntary choice for each individual farmer and a considerable percentage of farmers are likely to remain on the full accounts system given that it has its own inherent advantages for farmers of a particular scale or in particular sectors. Many farmers may require full accounts for other purposes such as banks etc.

For these reasons the introduction of an additional system for the calculation of farmers' tax liabilities is not warranted.