Contractors are “bitterly disappointed” that Budget 2022 – which was announced yesterday (Tuesday, October 12) – did not allow for a rebate scheme for agricultural contractors for the increased costs of Carbon Tax, according to the group that represents them.

The Association of Farm and Forestry Contractors in Ireland (FCI) also said yesterday evening that the budget did not provide for changes in the “inequality of the double Carbon Tax refund that remains only available to farmers”.

The FCI highlighted that the government’s Tax Strategy Group – which advises government on taxation issues in the run-up to national budgets – had said that the current approach “gives rise to issues of equity for agricultural contractors”.

John Hughes, national chair of FCI, said: “This Budget 2022 did nothing to rebalance the situation and continues to make agricultural contractors marginalised compared with farmers in terms of Carbon Tax refunds.”

According to the FCI, proposals from the Revenue Commissioners that would facilitate the gathering of data in relation to the levels of tax relief being availed of were also not mentioned in the budget.

“The increased Carbon Tax will add at least €30 million to contractor fuel costs in 2022, based on consumption of more than 350 million litres annually by the sector,” Hughes highlighted.

“This comes on top of the existing 50% increase in agricultural diesel costs already incurred this year,” he added.

“FCI members will be forced to significantly increase service charges to their farmer clients in 2022 in advance of the further increase in diesel fuel costs which have been specifically designed to hit our sector in the days ahead of facing into the 2022 silage harvest.

“This is a direct hit on Irish agriculture. Contractor charges will have to increase to cope with the spiraling increases in fuel, machinery and tyre costs, or we will be rapidly forced out of business,” the FCI national chair argued.

Hughes concluded: “Without farm and forestry contractors, the Irish agri-food system would simply not exist.”