Michael Moynihan (Cork North West, Fianna Fail) | Oireachtas source

I thank the office of the Ceann Comhairle for allowing Deputies to raise this matter. Approximately 400 farmers received a letter from the Revenue Commissioners yesterday on shares issued by Kerry Co-op. I understand Revenue has been through the mill on co-op shares which it refused to accept as income, determining instead that they were subject to capital gains rather than income tax when they were sold. Some people questioned this determination and I understand Revenue made clear at the time that the 33.3% capital gains tax rate applied to these shares. Why has the position changed on this type of share? As my colleagues stated, clarification is required on the issue.

If an issue arose with these shares, it should have been flagged to avoid farmers reading the letters which Deputy John Brassil cited at their kitchen tables. The language used is unacceptable. The farmers involved submit income tax returns and some of them have paid capital gains tax on income received from the sale of Kerry Co-op shares. They did so with the approval of the Revenue Commissioners, including in years for which the Revenue Commissioners have stated an income tax liability arises. They traded shares and paid capital gains tax on the income from such sales and the Revenue Commissioners subsequently issued them with tax clearance certificates. Why has this change been made without first warning farmers?

Everyone understands and accepts it has been a ferociously difficult year for farming, particularly for the dairy industry. The price of milk has been at its lowest in a generation and yet the Revenue wrote willy-nilly to the farmers in question and has indicated more letters will be going to other farmers involved. There should have been some indication as to what Revenue was thinking.

How come Revenue changed its mind? It is not as if these shares were not declared by farmers to the Revenue Commissioners. In some instances, they have traded the shares, paid the 33% capital gains tax on them and were given the okay by the Revenue Commissioners. Given this development, a farmer with 70 cows producing 70,000 gallons of milk could be landed with a bill of €10,000. Anyone who knows the farming community knows that after one of the most difficult trading years in living memory, such a farmer would not even have 10,000 cent to pay the Revenue Commissioners, let alone €10,000. This is high-handed and needs to be explained. As my colleagues said, the Revenue Commissioners need to give us an explanation. The whole issue has to be revisited because it has put fear into the farming community in the Kerry Group region, as well as other farmers in milk processing. Will the Minister of State clarify the situation? The Revenue Commissioners owe us a detailed explanation so we can inform our constituents of their thinking.

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