Milk Quality Ireland has today (Tuesday, December 12) called on the government to restore the value added tax (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.
The remit of the group is “to enhance and improve milk quality standards across the Irish dairy industry”.
VAT refund
Vivian Buttimer, chair of Milk Quality Ireland and a board member of ICOS, said: “The provision of a VAT refund on expenditure incurred on the erection of farm buildings and structures, including fixed plant items, supports the ongoing modernisation and improvement of dairy farm facilities.
“These essential investments translate into broader improvements in milk quality, animal welfare, sustainability and labour efficiency outcomes.”
Buttimer said that “the change in interpretation by Revenue is greatly concerning for farmers who have made investments in fixed plant items such as milk bulk tanks with the expectation of receiving a VAT refund”.
“Furthermore, many farmers will have no choice but to reconsider long-planned investments in their dairy facilities, as the change in VAT treatment will in effect nullify the benefit of grant aid provided by the State under TAMS for these investments,” he said.
Revenue
The Irish Farmers’ Association (IFA) has told Agriland that it has received calls from farmers who have made large purchases without realising they would be unable to receive VAT back.
It has also been contacted by manufacturers who are concerned that the uncertainty around what qualifies for a VAT reclaim could put farmers off making big purchases.
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”.
Milk Quality Ireland has written to the Minister for Finance Michael McGrath and Minister for Agriculture, Food and the Marine Charlie McConalogue about the matter.
“We have stressed in the strongest possible terms the importance of on-farm capital investment to the objectives of milk quality and food safety.
“It is vital that the government takes the necessary steps needed to reinstate the VAT refund for fixed plant items such as milk bulk tanks, milking parlour equipment, meal bins, automatic calf feeders and automatic scrapers as these are essential farm infrastructure,” Buttimer said.