22 SEPTEMBER 2016
ICSA president Patrick Kent has welcomed comments made by Minister for Agriculture, Food and the Marine Michael Creed which suggests that the Government is actively considering allowing farmers to temporarily shelter income from tax in a good year to cope with the challenges of price volatility.
“ICSA has been making representations on this since the agri-taxation review process and in the context of the budgetary process. We outlined the need for this again in our meeting with Minister Creed in August when we discussed the budget. ICSA believes that the tax system must respond to the highly volatile nature of farm incomes, and especially the fact that a good year is the exception on beef farms. While income averaging is a help, it is not sufficient. ICSA wants to see farmers being able to defer tax on a portion of income set aside in an unusually good year and taxed when this money is drawn down in a subsequent bad year.
We must remember that for most farmers, lack of income is the norm. However, because tax liabilities are paid relating to the previous year’s accounts, the inflexible nature of the current regime is causing real challenges to cash flow particularly when a farmer reverts to having a bad year after previously having had an exceptional good year.”
“We therefore welcome comments that the Government is looking at this issue and is paying attention to ICSA concerns about increased volatility.”