Paddy McHugh (Galway East, Independent)
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Question 323: To ask the Minister for Finance if he will introduce a provision to ensure that no capital gains tax arises on the disposal of farmland to a local authority for road building or road widening purposes provided the proceeds of the compensation are reinvested in farm business assets or to fund retirement scheme; and if he will make a statement on the matter. [34524/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I have no plans to introduce such a relief. Capital Gains Tax applies to farmers as it does, and should apply, to those disposing of property in general. The abolition of reliefs allows for a lower rate of tax for all.

Paddy McHugh (Galway East, Independent)
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Question 324: To ask the Minister for Finance if he will introduce an increased tier of tax relief of €25,000 for rental income arising from the leasing out of farmland for farming periods of 12 years or more; and if he will make a statement on the matter. [34525/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Deputy will appreciate that in line with normal practice in the run up to the annual Budget and Finance Bill I do not wish to comment on the intention or otherwise to make changes in taxation.

Paddy McHugh (Galway East, Independent)
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Question 325: To ask the Minister for Finance if he will introduce a targeted relief from stamp duty to farmers for farm consolidation where purchase or sale of land reduces the number of land parcels in a holding or reduces the distances between individual land parcels or increases the size of the overall holding; and if he will make a statement on the matter. [34526/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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As the Deputy is aware, I do not comment on possible tax changes ahead of the Budget. However, as far as the existing tax policy is concerned, he may be aware that in Budget 2005, I announced a special stamp duty relief relating to an exchange of farm land between two farmers for the purposes of consolidating each farmer's holding. The relief is contained in section 121 of the Finance Act 2005 which provides that no stamp duty will be charged on an exchange of such lands where the lands are of equal value. In a case where the lands exchanged are not of equal value, stamp duty will only be charged on the amount of the difference in the value of the lands concerned. This relief was introduced for a period of two years commencing 1 July 2005.

At the Partnership talks earlier this year it was agreed to look at the possibility of extending this relief to cases where only one farmer is consolidating his/her farm holdings. However, as was stated at the time, such a measure will need EU Commission approval, which cannot be taken for granted.

Paddy McHugh (Galway East, Independent)
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Question 326: To ask the Minister for Finance if he will extend to all tax payers the employee PAYE tax credit through the system of personal credits; and if he will make a statement on the matter. [34527/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The position is that the PAYE allowance, as it was then, was introduced in 1980 to improve the tax progression of PAYE taxpayers and to take account of the fact that the self-employed generally then had the advantage of paying tax on a preceding year basis. The argument was also made at the time that the general scheme of allowances discriminated against employees and in favour of other taxpayers.

There have been changes since 1980 — the self-employed now pay tax on a current year basis, for example. However, the PAYE allowance has become a tax credit. Moreover, given that there can be significant timing advantages in the payment of tax for the self employed, the employee credit is still perceived as necessary to ensure a balance in the system.

I might also mention that implementation of the Deputy's proposal would cost about €845 million in a full year. I have no plans to extend to all taxpayers the employee PAYE tax credit as proposed by the Deputy.

Paddy McHugh (Galway East, Independent)
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Question 327: To ask the Minister for Finance if he will introduce a targeted capital gains tax farm consolidation re-investment relief whereby the proceeds from the sale of farmland by farmers are reinvested into replacement farmland without charges to capital gains tax; and if he will make a statement on the matter. [34528/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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As the Deputy is aware, I do not comment on possible tax changes ahead of the Budget. However, as far as the existing tax policy is concerned, he may be aware that it was announced in the 2003 Budget that no rollover relief would be allowed for any purpose on gains arising from disposals on or after 4 December 2002. This relief was introduced when CGT rates were much higher than current levels. In effect, it was a deferral of tax to be paid, where the proceeds of disposal were re-invested into replacement assets. The taxation of these gains would take place following the eventual disposal of the new assets without their replacement.

The abolition of this relief was in accordance with the overall taxation policy of widening the tax base in order to keep direct tax rates low. Such reliefs and allowances made sense when CGT rates were 40% and above. In Budget 1998, the rate was halved from 40% to 20%. Taxing capital gains when they are realised is the most logical time to do so, and this change brought CGT into line with other areas.