Some of the importers are using bogus Irish VAT numbers, according to Farm Tractor and Machinery Trade Association president Eamonn Tinney Jnr.
He warned that a dramatic increase in used machinery imports from Britain is one of the most challenging circumstances in many years for the Irish farm machinery industry. It has also been hit by the collapse of the construction sector, which had become a substantial market in recent years; reduced farmer purchasing power due to lower agricultural commodity prices and rapid decline in off-farm income; the continued weakness of sterling against the euro and an overhang of high-priced used machinery due to strong sales in recent years.
“Often the only way to get a sale is at substantial discounts to the purchase price, a serious threat to the profitability of many farm machinery businesses,” said Mr Tinney at the FTMTA’s AGM.
Finance Minister Brian Lenihan has said he is conscious of farm machinery business difficulties, but cannot reduce the standard VAT rate. He said second-hand tractors imported from Britain are subject to the British standard rate VAT of 15%, but it would not be possible to reduce the Irish 21.5% VAT rate applicable to farm machinery without reducing it on all standard rated goods and services – which would cost €390 million per year.
The FTMTA represents more than 250 member firms, employing more than 3,500 in manufacture, distribution, sales and service.