Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I wish to comment on a related policy area and signal my intention to bring forward a minor technical amendment on Report Stage to correct a ministerial reference in the Forestry Act 1988. The proposed amendment is technical in nature and is intended to clarify that pension payments to be made to former civil servants under that Act are to be made by the Minister for Finance rather than the Minister for Public Expenditure and Reform.

I fully recognise that farm income volatility is a prevalent feature of the agricultural sector. In response, targeted relief to assist with income volatility is available to farmers under the income averaging scheme. The scheme provides a useful mechanism for smoothing out income volatility associated with the farming sector by allowing farmers to pay tax based on the average of the aggregate profits and losses of the farming trade over a five-year period. Initially, farm averaging was only available over three years. Then, in the Finance Act 2014, the time was extended to five years to assist in ameliorating volatility. In acknowledgement of the prevalence of income volatility my Department has sought to enhance and introduce further additional flexibility to the income averaging regime in recent budgets to recognise the reality of income volatility in the farming sector and to maximise the number of farmers who wish to level out volatile income through the averaging system. Different measures have been put in place. In the Finance Act 2014, the Finance Act 2016 and in this Bill I have made further changes relating to income averaging.

The Deputy will be aware that my Department conducted an agri-taxation review update. The review analysed the progress made in implementing the 25 recommendations in the 2014 agri-taxation review.

As there is already a targeted tool available to farmers in the form of income averaging, I decided not to go down the farm deposit route. As already mentioned, I have sought to further enhance the existing targeted income volatility support this year by opening up income averaging to all farmers. On the basis that a targeted scheme is in place, I consider that I have already conducted a review of agricultural taxes. Therefore, I do not propose to accept the amendment. However, I will keep this matter under review.