Richard O'Donoghue (Limerick County, Independent)
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235. To ask the Minister for Finance if discussions are expected to give VAT and taxation incentives to encourage landowners back into forestry in order to contribute to the Climate Action Plan. [54777/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Government launched the Climate Action Plan 2021 on 4 November 2021, this is a detailed plan for taking decisive action to achieve a 51% reduction in overall greenhouse gas emissions by 2030 and setting us on a path to reach net-zero emissions by no later than 2050, as committed to in the Programme for Government and set out in the Climate Act 2021. In addition to maintaining existing re-afforestation plans, it is intended that by 2030 a planting rate of 8,000 hectares a year will be achieved to increase carbon sequestration.

There is an existing tax incentive that encourages landowners into forestry. Section 232 of the Taxes Consolidation Act 1997 (TCA 1997) provides that profits or gains from the occupation of woodland in the State, which is managed on a commercial basis and with a view to realising a profit, are exempt from income tax and corporation tax (but not the Universal Social Charge and Pay Related Social Insurance).

Capital gains arising to an individual on the sale of woodlands are also exempt from capital gains tax (CGT) insofar as they relate to standing timber under section 564 TCA 1997. Any gain attributable to the underlying land is however subject to CGT.

I am advised by Revenue that the VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. The activity of forestry and other forestry services is considered an agricultural activity which is generally undertaken by farmers.

Farmers who elect to register for VAT and charge VAT on their supplies can claim a deduction for VAT incurred on costs that are used for the purposes of their taxable supplies.

Alternatively, farmers can remain unregistered and opt for the Flat Rate Scheme which is designed to reduce the administrative burden for farmers and to compensate them for the VAT borne on the purchases of goods and services relating to their activities. An unregistered, flat rate farmer can also claim a refund of VAT incurred on the fencing, drainage or reclamation of any land intended for use for the purposes of his or her farming business including forestry.

A reduced VAT rate of 13.5% currently applies to Forestry services. This includes lopping, tree felling, pruning, hedge trimming & similar services. It also includes combined sowing & planting. Consultancy services for forestry are also subject to a reduced rate as they are considered a farm advisory service. However the standard VAT rate applies to drawing of timber & haulage which is standard rated.

Denis Naughten (Roscommon-Galway, Independent)
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236. To ask the Minister for Finance the plans there are or proposed to amend the disabled drivers and disabled passengers scheme; and if he will make a statement on the matter. [54602/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Disabled Drivers & Disabled Passengers Scheme provides relief from Vehicle Registration Tax and VAT on the purchase and use of an adapted car, as well as an exemption from motor tax and an annual fuel grant.

The Scheme is open to severely and permanently disabled persons as a driver or as a passenger and also to certain charitable organisations. In order to qualify for relief, the applicant must hold a Primary Medical Certificate issued by the relevant Senior Area Medical Officer (SAMO) or a Board Medical Certificate issued by the Disabled Driver Medical Board of Appeal. Certain other qualifying criteria apply in relation to the vehicle, in particular that it must be specially constructed or adapted for use by the applicant.

To qualify for a Primary Medical Certificate an applicant must be permanently and severely disabled, and satisfy at least one of the following medical criteria, in order to obtain a Primary Medical Certificate:

- be wholly or almost wholly without the use of both legs; - be wholly without the use of one leg and almost wholly without the use of the other leg such that the applicant is severely restricted as to movement of the lower limbs;

- be without both hands or without both arms;

- be without one or both legs;

- be wholly or almost wholly without the use of both hands or arms and wholly or almost wholly without the use of one leg;

- have the medical condition of dwarfism and have serious difficulties of movement of the lower limbs.

The current medical criteria medical criteria were included in the Finance Act 2020, by way of amendment to Section 92 of the Finance Act 1989. This amendment arises from legal advice in light of the June 2020 Supreme Court judgement that the medical criteria in secondary legislation was not deemed to be invalid, nevertheless it was found to be inconsistent with the mandate provided in Section 92 of the Finance Act 1989 (primary legislation).

While I am very aware of the importance of this scheme to those who benefit from it, I am also aware of the disquiet expressed by members of this house and others in respect of the difficulties around access to the scheme. With this in mind I provided an undertaking to review the scheme, including a broader review of mobility supports for persons with a disability. My officials have been carrying out preliminary work, including an examination of the main issues which will frame the scope of the review and engaging with other Departments and agencies.

Separately, I have reached out to the Minister for Children, Equality, Disability, Integration and Youth, in the context of a review that was commenced in March 2020 under the auspices of the National Disability Inclusion Strategy, to examine transport supports encompassing all Government funded transport and mobility schemes for people with disabilities. Its work was interrupted by the COVID-19 pandemic. Minister O’Gorman has confirmed that he has asked his officials to reconvene the working group established to carry out that review at the earliest opportunity and we are both agreed that this is the most appropriate forum for the review. With this in mind, my officials will work closely with officials from the Department of Children, Equality, Disability, Integration and Youth to progress this review, and on foot of that will bring forward proposals for consideration.