Charlie McConalogue (Donegal, Fianna Fail)
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352. To ask the Minister for Finance if he has examined the feasibility of simplifying the tax code in order that farmers whose gross income from farm payments and sales is less than €30,000, for example, would have the option of making a detailed tax return or choosing a system based on average gross margin on declared income for different types of farming as assessed by Teagasc each year; and if he will make a statement on the matter. [26388/16]

Michael Noonan (Limerick City, Fine Gael)
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The self-assessment tax system is based on giving taxpayers control and responsibility for their tax affairs. The self-assessment system applies uniformly to all self assessed taxpayers. Revenue provides comprehensive assistance to taxpayers in complying with the self-assessment obligations.

Every business sector, including farming, has a requirement to keep full and accurate records of their business; which are sufficient to enable them to make a proper return of income.  Changing the basis of taxation for a lower income cohort of one particular business sector would give rise to inconsistent treatment between, either different categories of self-assessed taxpayers, or self-assessed taxpayers with different levels of income. Additionally, a system on the lines suggested by the Deputy based on an average gross margin could result in certain taxpayers paying a higher amount of tax than they would be otherwise due to pay. Having different bases of calculating tax for different sectors would give rise to confusion for the taxpayers concerned and a need for additional support in understanding the requirements.

I am aware that Revenue has in place a range of supports to assist taxpayers making their tax return including the ongoing development of the Revenue Online Service (ROS) and the pre-population of certain information onto the taxpayer's online return. I understand that nearly 90% of farmers use ROS for filing their tax returns. 

For taxpayers not registered for Revenue's online services, there are a number of simplified paper income tax returns available, which aimed at reducing the administrative burden on any taxpayer whose tax affairs are not overly complex. The Form 11S is a short income tax return and I understand from Revenue that 5% of farmers are provided with the Form 11S. Additionally, for lower income taxpayers, Revenue makes available a two-page paper tax return (a Form 11P) including, where possible, certain pre-populated information. Some 20% of the cases to whom a Form 11P is sent are farmers.

Finally, I am also advised by Revenue that they are working on expanding the range of information that is pre-populated in taxpayer returns to include information about payments from the Department of Agriculture, Food and the Marine. This work will be particularly useful to the farming community and it is expected to be available for the 2016 annual tax return which is due to be filed in 2017.

Charlie McConalogue (Donegal, Fianna Fail)
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353. To ask the Minister for Finance if he has examined and costed the feasibility of permitting an investment in co-operative shares to be exempt from income tax and instead to tax such shares at the point of sale; and if he will make a statement on the matter. [26389/16]

Michael Noonan (Limerick City, Fine Gael)
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I am advised by the Revenue Commissioners that the information available from tax returns is in such a form that the costing requested by the Deputy cannot be provided. 

The proposal from the Deputy would appear to seek an exemption from income tax, USC and PRSI for income which is used to purchase shares in co-operatives. However, there is no indication as to whether the Deputy would then seek the imposition of a charge to income tax, USC and PRSI on the value of the shares when sold, in place of the current CGT charge in respect of any relevant gains.

It is important to note that any proposal to change the manner in which investments in shares in co-operatives are treated for tax purposes, might have consequences for shares of other types. In addition, the potential for such a change to be classed as State aid would have to be carefully considered.