Vivian Buttimer, chair of MQI, whose remit is to enhance and improve milk-quality standards across the Irish dairy industry said: “The provision of a VAT refund on expenditure incurred on the erection of farm buildings and structures, including fixed plant items, supports the ongoing modernisation and improvement of dairy farm facilities.” The MQI chair, who is also a board member of ICOS added: “These essential investments translate into broader improvements in milk quality, animal welfare, sustainability and labour efficiency outcomes.”
He added: “The change in interpretation by Revenue is greatly concerning for farmers who have made investments in fixed plant items such as milk bulk tanks with the expectation of receiving a VAT refund. Furthermore, many farmers will have no choice but to reconsider long-planned investments in their dairy facilities, as the change in VAT treatment will in effect nullify the benefit of grant aid provided by the State under TAMS for these investments.”
The MQI chair confirmed that the organisation has written jointly to the Minister for Finance and Minister for Agriculture, Food and the Marine, to stress the importance of on-farm capital investment to the objectives of milk quality and food safety.
“It is vital that the Government takes the necessary steps needed to reinstate the VAT refund for fixed plant items such as milk bulk tanks, milking parlour equipment, meal bins, automatic calf feeders and automatic scrapers as these are essential farm infrastructure,” he said.
‘Petty’
MQI joins other farming groups and organisations in a united call for the VAT refund to be restored. Outgoing president of the Irish Creamery Milk Suppliers’ Association (ICMSA), Pat McCormack described the decision to rescind the VAT rebate to farmers buying bulk milk tanks, calf feeders and other items as ‘petty’. He said the decision meant that farmers investing in better equipment aimed at long-term sustainability would now have to write-off the expenditure over seven years instead of getting the VAT rebate within three weeks – as was the previously the case.
Chair of the Irish Farmers’ Association (IFA) Farm Business Committee, Rose Mary McDonagh, said that farmers have been making capital expenditure to increase their farm efficiency and sustainability, with the expectation of receiving a VAT refund. “After making these investments, they now find out they will no longer qualify. Many of these farmers would have availed of bridging finance for the VAT cost and now find themselves trying to figure out how to repay these short-term finance arrangements.” She added that the IFA is raising this issue with banks and other lending institutions, as well as Minister McConalogue.