Irish Cattle and Sheep Farmers’ Association (ICSA) national president, Gabriel Gilmartin, has said that the majority of farmers will not be impacted significantly by the Budget but that there were several measures that would be quite important to specific categories of the sector.
“We welcome the 50% stock relief (100% for young farmers) for registered farm partnerships, the €5 million for beef discussion groups, the reduction in stamp duty to 2% and the reopening of the TAMS investment supports. We also welcome the VAT refund for wind turbines,” Mr. Gilmartin said.
“However, we are disappointed with the increase in capital gains tax and capital acquisitions tax to 30% and increases to carbon tax. The increase in capital gains tax is particularly regrettable given that there is still no restoration of rollover relief relating to the purchase of replacement farm land after compulsory purchase or relief for farm consolidation transactions.
“On the taxation side, the changes to capital gains tax have been an attempt to incentivise farm transfer before the age of 66. However, this has been outweighed by increases in CAT and CGT to 30%, as well as the reduction in the CAT threshold to €250,000. The risk is that increased rates will discourage farmers from making any move during their lifetime.
“The increase in carbon tax is unfortunate notwithstanding the delay on imposing the increased rate on “green” diesel to May 2012 and the double income tax relief. A number of problems may arise with this approach including the fact that the higher rate will coincide with the peak silage-making season. Also it is unclear as to how the double income tax relief will work in practice and whether it will apply to agricultural contractors. At least the relief shows an understanding of the need for competiveness in terms of fuel costs. Rural dwellers in general will be unhappy with the increased carbon tax and it will add to the transport costs for all farm inputs and outputs leading to a lowering of competitiveness,” Mr. Gilmartin continued.
“The €5 million allocated to beef discussion groups is a welcome move and we commend the Minister for Agriculture, Food and the Marine for this. We look forward to its implementation at the earliest possible date.
“The €30 million cut to Disadvantaged Area Scheme (DAS) and the 10% cut in REPS 4 payments are the worst parts of the Budget but we are hopeful that active farmers will be spared the brunt of the cuts to the DAS. We would now urge Minister Coveney to ensure that all farmers who have exited REPS 3 in 2011 are catered for by opening AEOS in 2012,” Mr. Gilmartin concluded.