Vol. 461 No. 2
33 Mr. Cowen asked the Minister for Finance his views on the situation whereby it is more tax efficient for farmers with disposable income to invest in section 35 films or section 23 apartments rather than re-invest in their own business. [1873/96]
First, the argument that it may be more tax efficient for a farmer to invest in films or urban renewal than in his own business is not confined to the farming community. The same would apply to any self-employed businessman or professional. This is because the film relief and the urban renewal incentives were specifically designed to promote investment in those areas. They were not meant to be used as a standard against which all other investment scenarios would be measured.
Second, I would point out to the Deputy that the position for farmers reinvesting in their own business contains several positive elements. Farmers have the same level of capital allowances for investment in plant and machinery as other sectors, i.e. 15 per cent per annum for 6 years and 10 per cent in the seventh year. Similarly, with regard to investment in farm buildings including sheds, fences, yards, roads, holding yards, drains or land reclamation, the farmer can write off the cost over seven years. These capital allowances for farm buildings are highly favourable — industrial buildings are written down at 4 per cent per annum over 25 years, while commercial buildings (outside the designated areas) have no capital allowances.
