Farmers will not accept any further carbon taxes on diesel, says ICMSA

FARMERS will not accept any further carbon taxes on agricultural diesel in the forthcoming budget, according to the ICMSA.

ICMSA deputy president John Comer, in an address to the joint Oireachtas committee on Communications, Natural Resources and Agriculture, recalled pre-election assurances to this end made by Taoiseach Enda Kenny. The ICMSA is urging the Government to honour this commitment to not increase the carbon tax on agricultural diesel.

Mr Comer said: “Based on figures contained in the National Recovery Plan for 2012, it would seem that a figure of €220m additional carbon tax may be implemented in 2012. The revised budgetary adjustment figures announced by the minister involving a total tax take of €1.6 billion may actually increase that figure further.

“On the eve of the general election, we met the Taoiseach in his home constituency where he emphasised that there would be no increase in the carbon tax on agricultural diesel and he emphasised this provision in the Fine Gael manifesto.

“Following the general election, the Government parties agreed to include this in the Programme for Government in which it was specifically stated that the Government will exempt farm diesel from further increases in farm tax. Based on CSO data, the price of motor fuel used in agriculture has increased by over 45% since 2009.”

Mr Comer also cautioned the Government against any thoughts it might have of reducing the 90% relief from capital acquisition tax as it currently applies to agricultural holdings. He calculated that a reduction of this relief to 75% combined with an increase in the tax rate, could see an inheritance tax liability of €85,000 on a dairy farm with 100 cows.

“This would represent a reintroduction of the old estate duties or death duties as they were normally referred to,” said Mr Comer. “Putting this in context, it would mean that in the above example of a family farm, we would have moved, over a very short number of years, from a situation where there was Installation Aid and Early Retirement Schemes to a situation where there may actually be increased borrowing required to fund an inheritance tax liability.

“We have proposed to Minister Noonan that where a farm is farmed for a period of time by a donor and that farm is subsequently farmed by a son/daughter there would be no liability to capital acquisitions tax regardless of what changes be brought about to thresholds or rates of tax.”

Meanwhile, the ICMSA has urged all of its members to attend its AGM on Saturday in the Carlton Castletroy Park Hotel in Limerick.

At last year’s annual meeting in the same venue, Taoiseach Brian Cowen was given a robust reception by attendees. This year’s guests include Taoiseach Enda Kenny, Agriculture Minister Simon Coveney, and MEPs Mairead McGuinness and Liam Alyward.