Dáil Éireann - Volume 387 - 02 March, 1989

Ceisteanna — Questions. Oral Answers. - Farming Income Tax.

6. Miss Quill asked the Minister for Finance in respect of the years (i) 1979 and (ii) 1988, the total amount of income tax on farming; the amount by which the yield of income tax in real terms has increased over that period; the amount by which agricultural income is estimated to have increased in real terms over the same period; and the real value in 1989 terms of the yield of agricultural rates for 1979.

Minister for Finance (Mr. Reynolds): The net receipt of income tax on farming profits in 1979 and 1988 is estimated at £16 million and £82 million respectively. The 1988 figure includes some £38 million for arrears collected under the amnesty.

It is estimated that, in real 1979 terms, the 1988 yield of £82 million represents an increase of £19.6 million or 122 per cent over the net receipt of £16 million for 1979. Excluding the amnesty effect, the corresponding increase in real 1979 terms is £3.1 million or 19 per cent.

While the estimate of total agricultural income has increased in nominal terms over the period in question, it has declined in real 1979 terms by about £66 million or 8¾ per cent. The trend in more recent years, of course, shows a real increase in income.

The amount of agricultural rates levied in 1979 was £35.6 million. A breakdown of the rates paid between agricultural and other property is not available but it may be assumed that almost all this £35.6 million was in fact paid. The real value in 1989 terms of this figure would be about £84 million.

Mr. McDowell: Taking the income tax [2249] and agricultural rates collectively, and for a moment disregarding VAT refunds — which I suppose have to be taken into the whole equation — is it the case that there has been substantially less money in real terms coming from the agricultural community under those two heads over the past decade?

Mr. Reynolds: I must point out that agricultural rates were abolished in 1982 following the 1981 High Court judgment. The estimated figure for rates of £84 million is somewhat academic, as it assumes that the yield would have gone up in line with the consumer price index, that no change would have taken place on the basis on which agricultural relief was operable and that the High Court judgment had not been given. We are into an academic exercise.

Mr. Noonan (Limerick East): I wonder if the Minister has a figure for the expected yield from farm income tax for 1989? Second, does the Minister intend in the Finance Bill to introduce any modifications to farm taxation along the lines suggested by the IFA or alternatively the two options suggested by the ICMSA?

Mr. Reynolds: I have no plan to change the system of farmer taxation, and I have said this on many occasions. I expect a higher yield this year than last year, although last year's figure somewhat complicates the situation in that we have already received some tax that we might have expected to get in this year. However, I expect an increased yield this year.

Mr. Noonan (Limerick East): I presume the Minister is talking about an increased yield and is not just referring to the amnesty?

Mr. Reynolds: I am talking about some increase in the yield.

Mr. Noonan (Limerick East): Is the Minister referring to an increase on £82 million?

[2250] Mr. Reynolds: I am talking about an increase on £42 million.

Mr. Noonan (Limerick East): The Minister expects some increase on £42 million. What is the estimate for farm taxation in 1989 — I am sure the Minister has some estimate at this stage?

Mr. Reynolds: I am sure we have. The information is not included in the tables on the file but I will send the information to the Deputy.