Ash dieback payments should not be taxed - ICSA
The president of the Irish Cattle and Sheep Farmers' Association (ICSA) Sean McNamara has said that ash dieback payments made under the Climate Action Performance Payment (CAPP) should not be taxed.
The CAPP is paid at a rate of €5,000/ha and is part of the Ash Dieback Action Plan, which includes an overall financial package of up to €237 million for forest owners impacted by ash dieback disease.
The CAPP payments, which commenced last week, will continue over the coming weeks, with a total of €1.83 million expected to be issued in the first tranche which includes 158 forest owners.
The ICSA president is strongly opposed to the Universal Social Charge (USC) and Pay Related Social Insurance (PRSI) being applied to these payments.
The Ash Dieback Task Force has confirmed that all CAPP payments would be subject to USC rates ranging from 0.5% to 8%, depending on income, and a 4% PRSI levy which must be paid by farmers as part of their annual tax bill.
“The CAPP was introduced to compensate ash forest owners who have suffered significant losses due to the spread of ash dieback disease and are now undertaking the difficult and costly work of removing diseased trees and replanting their forests. This compensation should not be taxed.
“Farmers and forest owners did not cause this devastating disease, yet they are now being tasked with the challenging process of managing it through removal and replanting efforts.
"The CAPP was designed specifically to support these individuals, who are working to eradicate an ecological threat they did not introduce.
"It is grossly unfair to treat these compensatory payments as taxable income," McNamara said.
The Department of Agriculture, Food and the Marine (DAFM) has also confirmed to Agriland that taxes are applied as standard practice across all forestry payments.
"USC and PRSI apply to all forestry scheme payments, including the Climate Action Performance Payment.
"However, payment of these by an individual is dependent on thresholds as published by the Revenue Commissioners," a DAFM spokesperson said.
Sean McNamara disagrees with the stance taken by the department when it comes to CAPP payments.
“These payments were initiated to offset some of the losses incurred by farmers and forest owners due to ash dieback.
"It is neither just nor reasonable to subject these compensation payments to the same tax rules as regular forestry income," he said.
The ICSA president is calling on the government to exempt CAPP payments from USC and PRSI.
“These farmers and forest owners are going to considerable effort to eliminate a disease that threatens not only their livelihood but the health of our forests.
"It is time for the government to step up and support them in a fair and meaningful way, not burden them with unfair taxes," he said.
