Macra has called on Revenue to provide “clarity and certainty” on Value Added Tax (VAT) refunds on prescribed capital investments for unregistered farmers.
The farm organisation said that the “changing interpretation of eligible items” by Revenue is “particularly acute for young farmers”
Macra said that these young farmers are relying on VAT refunds as access to credit is cited as one of the main barriers to business development.
Macra
Macra national president Elaine Houlihan said a change in the interpretation of existing legislation by Revenue without any consultation is “not good enough”.
“It’s not good for business and is certainly not good for young farmers investing in their farm business and who need business certainty.
“Revenue is effectively trying to pull the rug from VAT refunds on certain farm capital investments and are causing farmers unnecessary financial stress, particularly young farmers,” she said.
“Farmers have done their business case for investments with banks and have factored in their VAT refunds and are now potentially left in a perilous position.
“Political intervention is needed to restore the default position for VAT refunds for unregistered farmers and to halt Revenues solo run on changing the interpretation of the legislation,” the Macra president added.
Revenue
Revenue has previously stated that it has not changed its approach to the refund order, and highlighted that each claim “is assessed on its own merits”.
However, the change has caused concern among farm organisations and the wider agricultural industry.
The chair of AgTech Ireland Padraig Hennessy claimed that a change in the approach to VATrefunds for farmers will result in job losses and damage Ireland’s climate and sustainability ambitions.
Hennessy, who called on Minister for Finance Michael McGrath to intervene, noted that farmers would have factored in the VAT refund when they made investment decisions for the enterprise.
“They contact us suppliers of agtech equipment and machinery to cancel their orders – leaving us at a major loss, with rapidly dwindling order books and having to change our staff rotas or even laying off some of our staff,” he said.
Milk Quality Ireland has also called on the government to restore the VAT refund for essential farm infrastructure.
The cross-sector collaborative body includes the Irish Co-Operative Organisation Society (ICOS), Teagasc, dairy co-operatives, milking machine manufacturers and milking machine technicians.