Dáil Éireann debate -
Tuesday, 27 Feb 1996

Vol. 462 No. 2

Written Answers. - Tax Returns.

Eamon Walsh

Question:

78 Mr. E. Walsh asked the Minister for Finance if he will ensure that the farming sector contribute its fair share of tax, taking into account the burden on the PAYE sector, the increase in incomes in the farming sector for the past three years, the anticipated increase in income of up to 10 per cent in the coming year nothing that the increase in income is not matched with an equivalent increase in tax returns in that sector; the income figure for each of the years from 1993 to 1995; the tax returned for each of the years from 1993 to 1995 from the farming sector; and if he will make a statement on the matter. [4443/96]

Minister for Finance (Mr. Quinn)

Farmers are assessable to tax on farming profits on actual income on the same basis as other self-employed taxpayers. The normal self-employed allowances may be offset against farming profits and there are also special provisions in relation to stock relief and income averaging. As with all self-employed taxpayers farmers are obliged to make annual returns of income and pay the appropriate tax by the due dates. Returns by farmers are also subject to audit in the same manner as other self-employed taxpayers. I am informed by the Revenue Commissioners that the evidence currently available from self-employed audits indicates that the compliance levels of farmers are comparable with those of other self-employed taxpayers.

The 1996 post-budget estimate of income tax revenue from farming profits is £74 million and reflects the cost of £3.3 million for the impact of budget concessions in 1996. The 1995 increase in farming profits is estimated at about 8 per cent over the 1994 level and the income tax estimate for 1996 is based upon a further projected increase in farm profits of about 6.8 per cent. The downward trend takes account of an adjustment for the impact of exceptionally favourable weather conditions on the performance of certain farming sectors in 1995 as well as a possible negative impact on farm incomes in 1996 attributable to the ongoing impact of CAP reform on agricultural exports.

The latest year for which information on the income of farmers is available is the income tax year 1992-93. The gross income of identified full-time farmers who were assessed to tax for 1992-93 was £590 million, excluding employment income of £203 million liable to tax under PAYE. The corresponding income of identified farmers with another trade or profession who were assessed to tax for the same year was £271 million. This amount includes income both from these other trades and professions as well as from farming.

The amounts of income tax paid on farming profits from 1993 to 1995 are estimated as follows: £55.0 million in 1993; £66.5 million in 1994; and £70.0 million in 1995. These figures reflect the tax take in respect of farming profits. They do not include PAYE tax paid on employment income earned by farmers or their spouses. Such tax is included in the overall collection of PAYE and is not distinguishable until after the income tax returns submitted by farmers have been analysed. An analysis of the returns for the income tax year 1992-93, the latest available, indicates that some £56 million in tax was paid by farmers, including farmers with another trade or profession, or their spouses, under the PAYE system for that year. The figures for income tax yields do not include any yields in 1993 and 1994 under the 1993 tax amnesty. Also excluded from the calculations are tax recipts from deposit interest retention tax because it is not possible to apportion that tax between particular classes of taxpayers.