Denis Naughten (Longford-Roscommon, Fine Gael)

I will explain this for the benefit of the Minister of State, who has many irate constituents because of this.

Capital gains tax was levied at 40% but farmers who were forced to sell to the State under a compulsory purchase order paid no capital gains tax if they reinvested the sum prior to, or within a subsequent five-year period of, the compulsory purchase order. The majority of farmers in this situation, including my constituents in south Roscommon, want to reinvest this sum in facilities or additional land for the farm. They will have to pay 20% tax rate regardless of whether they do this.

As president of the IFA, the Minister of State, Deputy Parlon, struck a deal with Charlie McCreevy on these issues, including an agreement that the capital gains tax scheme would not be changed. This was changed in the following budget when Deputy Parlon was Minister of State in the Department of Finance.

It is morally wrong that farmers are being forced to sell land below the market price. My colleague, Deputy Paul McGrath, states that the valuation set on land in County Westmeath is between €15,000 and €17,000 per acre when land is selling at €24,000 per acre on the open market. Not only are farms being undervalued, the Government is taking 20% from farmers after forcing them to sell land. It is morally wrong that this Government has made a U-turn on this decision and it is worse that the man who claimed to represent farmers was involved in the U-turn when he was Minister of State at the Department of Finance. I hope this scheme is amended on Committee Stage as this is the last chance for farmers in counties Galway and Roscommon. I ask the Minister of State to use his influence to remove this unjust tax and ensure farmers receive a fair price for land forcibly taken from them.

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