Dáil Éireann Debate, Thursday - 13 May 2021
221. Deputy Denis Naughten asked the Minister for Finance the reason the long-term lease of farmland for renewable energy projects is not eligible for the tax-free exemption for the long-term leasing of farmland; his plans to review this anomaly in view of the policy to increase the amount of renewable electricity on the grid in 2030 by 133%-250%; and if he will make a statement on the matter. [25355/21]
View answerSection 664 of the Taxes Consolidation Act 1997 (‘relief for certain income from leasing of farm land’) provides for the exemption of certain income from tax in connection with the leasing of farm land, where the land is let under a qualifying lease. This particular relief was designed to encourage longer term leases of farm land, with the targeted policy objective of assisting with the mobility and productive use of agricultural land. It is not clear how the suggestion to include within the scope of the relief land leased for renewable energy projects would be consistent with the purpose of the section 664.
As the Deputy will appreciate, the introduction of any new tax expenditure measure takes place in the context of the annual Budget and Finance Bill process. Proposals for tax expenditure measures are assessed in accordance with my Department's Tax Expenditure Guidelines. These make clear that it is important that any policy proposal which involves tax expenditures should only occur in limited circumstances where there are demonstrable market failures and where a tax-based incentive is more efficient than a direct expenditure intervention.
Furthermore, I must always be mindful of the public finances and the many demands on the Exchequer. Tax reliefs, no matter how worthwhile in themselves, lead to a narrowing of the tax base and a strong and convincing case for the benefits and outcomes needs to be articulated in order for due consideration to be given for the commitment of scarce taxpayer resources for such reliefs.
