Dáil Éireann Debate, Tuesday - 24 July 2018
1949. Deputy Niall Collins asked the Minister for Agriculture, Food and the Marine if he has engaged or will engage with the Revenue Commissioners in order that they are made aware that farmers will experience cashflow issues in 2018 due to the severe weather conditions; and if he will make a statement on the matter. [34038/18]
Amharc ar fhreagraWhile taxation policy is primarily the responsibility of the Department of Finance and the Revenue Commissioners has responsibility for the implementation of the taxation system, my officials continuously liaise with them on issues relating to agri-taxation.
In relation to cashflow, in Budget 2017 the Minister for Finance and I introduced an adjustment to the farmers’ ‘Income Averaging’ system, allowing an opt-out for an exceptional year. Income averaging for farmers is a recognition that income in the sector is volatile and that the annual tax liability can vary significantly. The system works by averaging the last five years’ income on a rolling basis. The nature of income averaging means that it is somewhat counter-cyclical in that in years of higher income, the tax liability is lower than it would normally be and in years of lower income, it is higher. This opt-out facility for exceptional years (once in a five-year period) allows farmers to pay on the basis of actual income instead of the average income. The additional liability is then paid over the following four years. This is a significant measure which enables better cashflow management for farmers.
Revenue has informed my Department that it understands that temporary cashflow difficulties can arise for taxpayers, including farmers, from time to time. When cashflow related challenges arise or are expected to arise, Revenue encourages early engagement with them as a means towards agreeing a way forward in terms of tax compliance. They stated that in their experience, where such early engagement occurs, then it is generally possible to arrive at an accommodation that gets the taxpayer successfully beyond the payment pressure point.
My Department and I are also engaging with the banks and the agri-food industry in relation to cash flow issues.
