Gerry Reynolds
Question:175 Mr. G. Reynolds asked the Minister for Finance his views on whether the taxation package in relation to forestry has an unfair advantage as compared with agriculture. [14071/98]
Written Answers. - Forestry Taxation.
The current tax package for forestry provides that profits are exempt from income and corporation tax. However, losses arising from forestry cannot be offset against other income. Compared to agriculture where the return from investment occurs within a relatively short number of years and on an annual basis, investment in forestry is of a long-term nature. Depending on the type of tree, it can take anything up to 30 or 40 years before the trees are mature enough to be harvested and profits realised. The strategy for forestry proposes to achieve an afforestation target of 17 per cent of (suitable) land cover by the year 2030. Currently, Irish forestry accounts for 8 per cent of suitable land cover as compared to an EU average of 31 per cent. The tax treatment of forestry is intended to encourage investment in this sector.