Budget 2016 welcomed by farming groups
The Minister for Finance, Michael Noonan, stated how important the farming and agri-food sector is to the economy when he announced Budget 2016.
The Department of Agriculture, Food and the Marine has been allocated €1.3 billion in Budget 2016.
The stock relief schemes currently available to farmers have been extended for a further three years by Minister Noonan.
To support the successful transfer of land from one generation to the next, the Minister of Finance proposed the introduction of a €5,000 tax credit for five years.
Here’s what the farming groups thought of Budget 2016:
IFA President Eddie Downey has welcomed the further progress made on farm taxation measures in Budget 2016.
Downey, in particular, welcomed the introduction by the Government of measures on farm succession to encourage a new generation of farmers to get involved with their parents in the business at an early stage.
He said a tax credit of €5,000 per year for five years was significant and would help farm families deal with the real challenges of inter-generational transfer.
The IFA President said the income tax credit of €550 for farmers and the self-employed, while long overdue, was very welcome and must be built on in future budgets.
Downey said the increase in the threshold for Capital Acquisitions Tax to €280,000 starts to reflect the increase in the value of assets, but much more needs to be done in future Budgets. He said the rollover of all existing farm tax reliefs for three years, including stock relief, is important for investment on farms.
Downey said the increase in funding for agriculture for next year to €1.3 billion will ensure that farmers entering new schemes under the RDP will finally get much-needed payments after years of cuts.
However, he said farmers will be insisting that the Minister accepts in more of the projected 50,000 applicants into GLAS this year so that full payments can be made in 2016.
Downey said the general changes to the income tax and USC and the increase in social payments, especially for older people and young families, will all help after some difficult years of spending cuts.
Macra na Feirme
Macra na Feirme National President, Seán Finan, welcomed the extension of the young farmer stock relief and the young farmer stamp duty relief in the budget.
“The 100% young farmer stock relief aids growth and expansion by allowing young trained farmers to offset an increase in the value of their stock against their tax liability.
“At the outset, all livestock farmers need to build up a viable production base through livestock. This is a long-term investment in the farm and needs to be achieved without a heavy tax burden,” he said.
Commenting on the stamp duty relief, he said that succession planning is crucial to ensure that young farmers and their families can plan the future of the family farm.
Macra na Feirme also welcomed the 24% increase in the Group A Capital Acquisition Tax personal threshold up to €280,000 following their representations in this area. This increase reflects the increase in asset values.
Macra also welcomed the introduction of an Income Tax Credit of up to €5,000 per annum for five years for those farming in a partnership who enter into an agreement to transfer the farm within a 10-year timeframe.
“This tax credit will encourage and promote progression planning on farm. This makes the model of farm partnership more attractive from a tax efficient position.
“This could be worth between €1,000 and €2,000 per annum over a five-year period to the farm business, based on your income,” he said.
Finan said that the Earned Income Tax Credit will be beneficial to farmers, helping to address the tax disparity between self-employed and PAYE workers.
ICMSA President John Comer has broadly welcomed the measures contained within Budget 2016 package.
Speaking on RTE he said that the measures announced by Ministers Noonan and Howlin represent the first steps taken by Government to redress the policies of austerity introduced over the past number of years.
“These are extremely volatile times for the farming sector, a point which ICMSA made in the strongest possible terms to Government in our pre-Budget submission. And it is against this backdrop that the Budget of 2016 must be assessed.
“I particularly welcome the extension of earned tax credits to self-employed people and farmers. For years, PAYE workers have benefitted from these measures to the total detriment of their self-employed counterparts.
“The measures contained within today’s Budget represent a partial balancing of this matter. But it is only the beginning of what must be a process to bring all workers on to the same level playing field.”
Comer noted the specific measures for young farmers included in Minister Noonan’s Budget speech.
“The introduction of an annual €5,000 tax credit when land is leased within a family is a positive move. But, again, it must be the start of a process.
“Farmers currently leasing land to complete strangers can avail of a tax credit with an annual €40,000 ceiling. Again the discriminatory nature of this scenario is obvious.
“Further clarification of all these measures is required. And we will be following these matters up with all relevant government departments as a matter of priority,” he said.
ICOS President, Martin Keane welcomed the overall budgetary package for the farming community as “targeted, balanced and fair”.
Keane stated that changes to income tax including the Earned Income Tax Credit for the self-employed is a very welcome initiative. Keane said that the tax credit to the value of €550 is a welcome initial first step by the Government to ensure equity and fairness in the income tax system.
ICOS also welcomed initiatives in Budget 2016 to extend stock relief measures for a further three years and actions to support farm succession.
The announcement by Minister Howlin to allocate additional funding to support agri-environmental and capital investment schemes under the Rural Development Programme was also welcomed by ICOS.