Matt Carthy (Cavan-Monaghan, Sinn Fein)
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66. To ask the Minister for Finance the status of a review into farm contractors regarding the carbon tax; and the measures that he intends to introduce arising from the review. [31309/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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The present position is that agricultural contractors are not entitled to avail of relief from increases in the carbon tax on farm diesel under section 664A of the Taxes Consolidation Act 1997. This is because farming, which is defined in section 654 of the Taxes Consolidation Act, requires the occupation of farmland. Agricultural contracting does not involve the occupation of farmland. The measure is specifically targeted at the farming sector to address the particular problems faced by family farms.

However, it should be noted that, currently, those who incur expenses in relation to farm diesel in the course of their trade of agricultural contracting may claim an income tax or corporation tax deduction for these expenses, including any carbon tax charged in respect of the diesel.

I indicated to the Deputy, most recently on 25 May last in my reply to question no. 182, that I expected that the review would be completed in advance of Budget 2023 and is likely to be completed by the early part of Q3 this year. This remains the case.

As the Deputy will appreciate, decisions regarding taxation measures are made as part of the annual Budget and Finance Bill process at the appropriate time and having regard to the sound management of the public finances and my Department's Tax Expenditure Guidelines. Furthermore, I must also have regard to ensuring that any tax measures are broadly aligned with the need to meet our Climate Action Plan targets.