Seymour Crawford (Cavan-Monaghan, Fine Gael)
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Question 244: To ask the Minister for Finance the number of farmers who were able to benefit from the special stamp duty concession towards land consolidation that was announced in budget 2005; if he is satisfied that this scheme has achieved its purpose; if it will be extended; and if he will make a statement on the matter. [36453/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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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.

The scheme was introduced on 1 July 2005 for a period of 2 years. I am informed by the Revenue Commissioners that from 1 July 2005 to 31 December 2005 there were two cases of farm consolidation relief. In 2006, from 1 January to 31 September there were 12 cases.

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, if such a measure was introduced, it would probably be subject to EU Commission approval.

Michael Ring (Mayo, Fine Gael)
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Question 245: To ask the Minister for Finance his views on introducing an increased tier of tax relief of €25,000 for rental home income arising from the leasing out of farmland for farming periods of 12 years or more subject to the same conditions as attached to the rental income relief currently available on leases of five to seven years; and if he will make a statement on the matter. [36455/06]

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 further on the intention or otherwise to make changes in taxation.

Michael Ring (Mayo, Fine Gael)
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Question 246: To ask the Minister for Finance if he will introduce appropriate tax arrangements in order to ensure that the maximum amount of funds are available to offset grower costs arising from the closure of the sugar beet industry. [36456/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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There are three significant financial elements of the sugar compensation package, as far as farmers, as sugar beet growers, are concerned. The first is an amount of €123 million, payable over the next seven years via the single payment scheme, as compensation for the drop in the support price of beet. The second element of the compensation package is the restructuring aid. In July 2006 the Government decided that a sum of €40m restructuring aid be reserved for beet growers. This decision has been challenged by the Irish sugar processor by way of Judicial Review proceedings in the High Court. The third element is the diversification aid worth almost €44m, which will be drawn down in the framework of a National Restructuring Programme to be prepared and submitted to the EU Commission by the end of this year.

As the details of the full compensation package have not yet been finalised for those farmers who have grown beet in the past, in respect of the cessation of this activity, it is not possible at this stage to give a definitive view of the matter.

Michael Ring (Mayo, Fine Gael)
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Question 247: To ask the Minister for Finance if he will ensure that no capital gains tax arises on the disposal of farmland to a local authority for road building or road widening purposes, provided that the proceeds of the compensation are reinvested in farm business assets or to fund retirement income; and his views on introducing this measure in budget 2007. [36457/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I do not comment on tax proposals ahead of the Budget. I might say, however, that Capital Gains Tax applies to farmers as it applies to those disposing of property in general. The abolition of reliefs allows for a lower rate of tax for all.

Michael Ring (Mayo, Fine Gael)
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Question 248: To ask the Minister for Finance if he will increase the CAT tax class thresholds in line with the general increases in asset values and where the principal private residence is situated off farm, it should be excluded from the assessment of gross assets. [36458/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Group thresholds, below which no Capital Acquisitions Tax (CAT) is liable, are increased automatically each year according to the Consumer Price Index. With regard to the exclusion of principal private residences from assessment, I assume the Deputy is referring to the gross assets test contained within CAT Agricultural Relief. In order to qualify for Agricultural Relief, at least 80 per cent of the assets of a beneficiary of a gift or an inheritance, after taking the gift or inheritance, must consist of agricultural property, as defined in section 89(1) of the Capital Acquisitions Tax Consolidation Act 2003. The 80% test was designed to ensure that the relief applies to farmers and as such to exclude individuals with substantial non-agricultural assets from qualifying for the relief.

If the principal private residence of the claimant is part of a farm, it will be considered as agricultural property for the purposes of the 80% test. Where the claimant has a principal private residence that is unconnected to farming, this will be included in the 20% section of the test. Capital Acquisitions Tax, along with all other taxes, are subject to review every year in the context of the annual Budget.

Michael Ring (Mayo, Fine Gael)
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Question 249: To ask the Minister for Finance if he will substantially expand the excise relief scheme for renewable energy in budget 2007 to ensure the development of a sustainable biofuel industry here; and if he will make a statement on the matter. [36459/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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While the promotion of biofuels and other renewable energy is primarily a matter for my colleague, the Minister for Communications, Marine and Natural Resources, I am pleased to inform the Deputy that in Finance Act 2006 I provided for significant tax measures to promote biofuels in Ireland. The scheme of excise relief for biofuels will:

provide for excise relief on up to 163 million litres of biofuels per annum;

cost over €200m over 5 years;

when fully operational, result in CO2 savings of over 250,000 tonnes per annum;

meet a target of 2% transport fuel market penetration by biofuels by 2008;

help reduce our dependency on conventional fossil fuels, and

stimulate activity in the agricultural sector.

The level of excise relief available is that which had been proposed by the Minister for Communications, Marine and Natural Resources in advance of last year's Budget and is regarded as a figure which is sufficient to match Ireland's output potential in relation to renewable energy crops for motor fuels over the period of the scheme. Opting for a Scheme where project applications are assessed in preference to a general blanket excise relief for biofuels ensures that projects chosen offer a greater degree of quality control to end-users and are best positioned to promote the long-term use of biofuels in the Irish market.

As regards other fiscal supports for the Biofuels industry, I would point out that also in Budget 2006, I introduced a 50% VRT relief for flexible fuel vehicles. These are defined as cars or small vans produced so as to be capable of using a blend of ethanol and petrol containing a minimum of 85% ethanol. This should encourage the purchase of vehicles that have been manufactured with flexible fuel capabilities which will result in lower pollutant emissions than conventional vehicles fuelled exclusively by petrol/diesel.

Joan Burton (Dublin West, Labour)
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Question 250: To ask the Minister for Finance if his attention has been drawn to the effect that the restrictive VAT threshold for service businesses has on small businesses, particularly those with a large cost element in their turnover; his proposals to raise the threshold; and if he will make a statement on the matter. [36460/06]

Joan Burton (Dublin West, Labour)
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Question 251: To ask the Minister for Finance if his attention has been drawn to the fact that bed and breakfast businesses in Northern Ireland have a higher VAT threshold than their competitors in the Republic; his proposals to raise the VAT threshold for bed and breakfasts here to a comparable level; and if he will make a statement on the matter. [36461/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I propose to take Questions Nos. 250 and 251 together.

The position is that traders making supplies in the State are obliged to register for VAT where certain turnover thresholds are exceeded or are likely to be exceeded in any continuous period of twelve months. However, businesses may if they wish opt to register for VAT where their turnover is below these thresholds. Businesses generally choose to register where they have a large input cost element to their turnover. It is important to note that VAT registered businesses are entitled to claim the VAT back on their expenses.

Under EU law, with which Irish VAT law must comply, Member States may only increase thresholds in line with inflation. The VAT registration thresholds for small businesses have been increased from €25,500 to €27,500 in the case of services (including Bed and Breakfast) and from €51,000 to €55,000 in the case of goods with effect from the 1 May 2006. As a result some 2,200 businesses were removed from the VAT net reducing the administrative burden for small businesses. The VAT registration thresholds were previously increased in 1994.

While the VAT registration thresholds in the UK are higher than ours it has also to be noted that the VAT rate applied to the provision of such services in the UK is 4 percentage points higher than our own at 17.5% compared to 13.5% in Ireland. I would add that Ireland has the fifth highest registration thresholds for services in the EU. Indeed, some EU Member States have no registration thresholds at all.

Any further consideration of the current thresholds would have to be balanced between the desirability of reducing the administrative burden on small businesses and the Revenue authorities and the need to avoid undermining tax compliance or causing competitive distortions. Finally, it is not customary for me to comment on any possible tax changes which may or may not arise in the context of the forthcoming budget.