Agri tax reliefs and green diesel excise duty reductions extended for farmers in Budget 2023

The Government has today announced the €11bn overall budget package, of which €2.1bn has been allocated to the Department of Agriculture, Food and the Marine.
Agri tax reliefs and green diesel excise duty reductions extended for farmers in Budget 2023

Pictured outside government buildings before presenting Budget 2023 to cabinet are Fianna Fail Minister for Public Expenditure and Reform Michael McGrath and Fine Gael Minister for Finance Paschal Donohoe. Picture: Leah Farrell/

Extensions to agricultural tax reliefs and green diesel excise duty reductions have been confirmed for farmers in Budget 2023. 

The Government has today announced the €11bn overall budget package, of which €2.1bn has been allocated to the Department of Agriculture, Food and the Marine, for measures targeted at farmers and agriculture.

The Government has described Budget 2023 as a "cost of living budget", which is "focused on helping individuals, families, and businesses to deal with rising prices".

Excise duty reduction and agri tax reliefs

During his speech to the Dáil this afternoon, Finance Minister Paschal Donohoe announced an extension to the current temporary reduction in the excise duty on fuel, including 'green diesel'.

"I am extending the current excise reduction of 21c/L in respect of petrol, 16c/L in respect of diesel, and 5.4c/L in respect of marked gas oil, and the 9% VAT rate for electricity and gas until February 28, 2023," Mr Donohoe said.

"I will be introducing the necessary financial resolutions later this evening in order to give effect to these extensions."

Mr Donohoe also confirmed that there will be extensions to five agricultural tax reliefs that are due to expire this year.

To December 31, 2024, three reliefs have been extended: young trained farmer stamp duty relief; farm consolidation stamp duty relief; and farm restructuring capital gains tax relief.

To December 31, 2023, two reliefs have been extended: young trained farmer stock relief; and registered farm partnership stock relief.

"The Government understands, and I understand, the worries which small business owners, farmers, pensioners, those who work really hard to get by, feel," Mr Donohoe told the Dáil.

"We know the challenges farming communities face as they deal with rising input costs while moving towards a sustainable future."

Mr Donohoe also made provision in Budget 2023 for a time-limited scheme of accelerated capital allowances for farmers, for the construction of modern slurry storage facilities. 

"This will assist the sector in further adopting environmentally positive farming practices," he said.

Carbon tax

Mr Donohoe also announced an increase of €7.50 in carbon tax - €41 to €48.50 - from October 12.

"This will mean that there will be an increase of just over 2c VAT inclusive per litre of petrol and diesel," he said.

"However, I also recognise the sharp cost of living challenges currently being faced by society, so the Government is therefore proposing to offset this carbon tax increase with a reduction to zero of the National Oil Reserves Agency [NORA] levy.

"The NORA levy, which is collected at a rate of 2c/L [VAT exclusive], will help offset the carbon tax increase which means that the price at the pump will not go up as a result of taxes or levies."

Minister for Expenditure and Reform Michael McGrath told the Dáil during his speech that "every additional euro raised in carbon tax will be returned to the people of Ireland through energy efficiency upgrades, social protection schemes to protect the most vulnerable, and measures to incentivise farming in a more environmentally friendly way". 

"An additional €211m will be made available in 2023, bringing the total carbon tax revenue available in 2023 for investment to €623m," Mr McGrath said.

"€81m in carbon tax funding will be provided to the Department of Agriculture, Food and the Marine in 2023. 

"This increased funding will be used to fund the new Agri-Climate Rural Environment Scheme (ACRES) detailed in Ireland’s Common Agricultural Policy Strategic Plan 2023. 

"This will support up to 50,000 farmers who undertake actions that will support improved outcomes on biodiversity, climate, air and water quality."

€2.1bn for DAFM

Mr McGrath told the Dáil that agriculture is "arguably the most important sector to our rural economy and is centred at the heart of many towns and villages across Ireland".

"Today, I am allocating €2.14bn for the Department of Agriculture, Food and the Marine for 2023, an increase of €283m on the 2022 allocation," he said.

"2023 is a significant year for the sector with the commencement of the new almost €10bn CAP Strategic Plan, CAP 2023-2027. 

"Over €500m of the allocation will further strengthen the sustainability of Irish agriculture and drive the sector's climate ambition."

Mr McGrath said that the agri-food sector is "an important contributor to our rural and national economy".

"In recognition of its exposure to the potential adverse impacts of Brexit, I am allocating €238m from the Brexit Adjustment Reserve for measures to alleviate the impact of Brexit on the sector.

"In line with the Programme for Government's undertaking on carbon tax, the 2023 portion of the carbon tax funds for agriculture are included in the allocation for the new ACRES agri-environmental scheme as part of the CAP Strategic Plan 2023-2027."

Meanwhile, in other measures, a levy on concrete blocks, pouring concrete, and certain other concrete products is also being brought forward.

The levy is expected to raise €80m annually and will be applied from April 3, 2023, at a rate of 10%.

Speaking in the Dáil, Mr Donohoe said that earlier this year, the Government agreed a redress scheme for homeowners who have been affected by the issue of defective products used in the building of their homes.

Mr Donohoe said that this levy is being introduced because this redress scheme "comes with a significant cost".

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