Dáil Éireann Debate, Tuesday - 4 October 2016
150. Deputy Michael Moynihan asked the Minister for Finance his plans in relation to the possible introduction of income tax averaging for farmers in recognition of the drastic fluctuations in farm income in recent years and the need for greater flexibility in this area; and if he will make a statement on the matter. [28606/16]
Amharc ar fhreagraAs the Deputy will be aware, income averaging is already available to farmers in recognition of the potential for volatility of their income. The normal basis of arriving at the taxable profit figure for a business is the net profit per accounts adjusted for certain tax rules. Income averaging is an alternative method of arriving at the taxable profit figure for farmers using an average of 5 years. The objective is to help to counteract the high volatility in income that is associated with the sector.
The Agri-Tax review recommended retaining and enhancing the income averaging scheme, by extending the period of averaging from 3 to 5 years, in order to give more scope for income smoothing within a commodity price cycle. I introduced that change in Finance Act 2014.
I am considering proposals around income volatility put forward from a number of organisations, including the Irish Farmers Association and the Irish Creamery Milk Suppliers Association as part of my deliberations for the Budget, and I have met these organisations to discuss their proposals. The introduction of any agri-taxation measures in this regard will be a matter for consideration by the Government, and any decisions made will be announced in the context of the Budget and Finance Bill.
