Dáil Éireann Debate, Tuesday - 10 December 2013
134. Deputy Seamus Kirk asked the Minister for Finance if he will consider extending tax relief for land leasing to companies who own agricultural land and wish to lease same; and if he will make a statement on the matter. [52810/13]
View answerTax relief for land leasing aims to incentivise the long-term leasing of farmland through encouraging more retired and part-time farmers to lease their land to younger farmers, especially those who are Young Trained Farmers. Widening the scope of this relief to include companies could lead to calls from other business sectors for a similar tax exemption, for instance, on rental profits. In addition, any changes to the land leasing provisions may be subject to EU State Aid approval. In any event, it is not clear to me that there is a difficulty here as companies who own land would tend not to want to lease it to those younger farmers.
The Department of Finance is often asked to consider new tax reliefs and incentives across all sectors of the economy without a full picture of how existing reliefs are working. The wide range of existing tax expenditures for the farming sector have grown up over time, largely on a piecemeal basis. It is very difficult to assess the effectiveness of existing schemes and whether or not they maximise value for money. The most recent estimates on the tax forgone to the sector is estimated at over €350 million, although there are a number of areas for which the data cannot be separated from other tax returns.
That is one of the reasons why I announced in my Budget speech that I would be commissioning a Review of the tax reliefs available to the farming sector. This is in line with the Department of Finance policy to review all tax expenditures on a regular basis.
The purpose of the Review will be to assess the costs and benefits of the various agriculture tax expenditures with a view to ensuring that the maximum benefit to the sector and the wider economy is obtained. The overall objective is not to change the level of Exchequer support to the sector through the tax system but rather to maximise the benefits to the economy for the existing level of State support and to ensure tax policy aligns with the objectives set out in Food Harvest 2020. Any recommendations would be considered in the context of Budget 2015. The issue of land leasing to companies is something that will be looked at in this Review.
There will be an opportunity for farmers and all those involved in the sector to give their views, once the review process is launched in 2014.
