Dáil Éireann Debate, Thursday - 16 December 2021
124. Deputy Matt Carthy asked the Minister for Finance if recommendations that arise from the proposed review into extending section 664A of the Taxes Consolidation Act 1997, to include agricultural contractors for the purpose of providing them similar status as farmers regarding the carbon tax on green diesel, will be implemented prior to the relevant increase in carbon tax taking effect in May 2022. [61889/21]
View answerThe present position is that agricultural contractors are not entitled to avail of relief from increases in the carbon tax on farm diesel under section 664A of the Taxes Consolidation Act 1997. This is because farming, which is defined in section 654 of the Taxes Consolidation Act, requires the occupation of farmland. Agricultural contracting does not involve the occupation of farmland. The measure is specifically targeted at the farming sector to address the particular problems faced by family farms.
My officials met with contractors' representatives in December 2019 and advised that my Department was intending to schedule a review of the scheme (and related aspects) in the context of a wider report on agri-tax reliefs and the Government's Climate policy.
The onset of the Covid-19 pandemic in the intervening period caused the review to be deferred and it has yet to take place. In the meantime, the status quo has remained in relation to the application and scope of section 664A. My Department is hopeful that the way will be clear for the promised review to be carried out, most likely in the first half of 2022.
It should also be noted that, currently, those who incur expenses in relation to farm diesel in the course of their trade of agricultural contracting may claim an income tax or corporation tax deduction for these expenses, including any carbon tax charged in respect of the diesel.
Finally, and as the Deputy will appreciate, decisions regarding taxation measures are made having regard to the annual Budget and Finance Bill processes, the sound management of the public finances and my Department's Tax Expenditure Guidelines. Furthermore, I must also have regard to ensuring that any tax measures are consistent with the need to meet our Climate Action Plan targets.
