The president of the Irish Cattle and Sheep Farmers’ Association (ICSA), Sean McNamara, has voiced his opposition to the taxation of ash dieback payments made under the Climate Action Performance Payment (CAPP). The CAPP, which is paid at a rate of €5,000/ha, forms a crucial component of the Ash Dieback Action Plan. This plan encompasses a comprehensive financial package of up to €237 million aimed at assisting forest owners affected by the ash dieback disease.
Commencing last week, the CAPP payments will be disbursed over the coming weeks, with an initial tranche of €1.83 million set to be distributed among 158 forest owners. McNamara, in his capacity as ICSA president, strongly opposes the application of the Universal Social Charge (USC) and Pay Related Social Insurance (PRSI) to these payments.
The Ash Dieback Task Force has confirmed that all CAPP payments will be subject to USC rates ranging from 0.5% to 8%, based on income, along with a 4% PRSI levy which farmers must include in their annual tax obligations. McNamara emphasized that the CAPP was established to provide compensation to ash forest owners grappling with substantial losses caused by the spread of ash dieback disease, as they undertake the arduous and costly task of removing diseased trees and replanting their forests.
“Farmers and forest owners did not introduce this devastating disease, yet they find themselves grappling with the challenging responsibility of managing it through removal and replanting efforts,” McNamara stated. “The CAPP was specifically crafted to support these individuals who are diligently working to combat an ecological threat that they did not bring upon themselves. It is fundamentally unjust to treat these compensatory payments as taxable income.”
The Department of Agriculture, Food and the Marine (DAFM) has clarified that taxes are routinely applied to all forestry payments, including the Climate Action Performance Payment. A spokesperson from DAFM informed Agriland that USC and PRSI are applicable to all forestry scheme payments, including the CAPP. However, the individual’s obligation to pay these taxes is contingent upon the thresholds outlined by the Revenue Commissioners.
McNamara, in disagreement with the department’s stance on CAPP payments, highlighted the intended purpose of these payments to alleviate some of the financial burdens faced by farmers and forest owners due to ash dieback. He argued that subjecting these compensation payments to the same tax regulations as regular forestry income is neither equitable nor reasonable.
The ICSA president is urging the government to exempt CAPP payments from USC and PRSI, emphasizing the significant efforts made by farmers and forest owners to combat a disease that poses a threat not only to their livelihoods but also to the health of the forests. “It is imperative for the government to provide fair and meaningful support to these individuals, rather than burdening them with unjust taxes,” McNamara asserted.
