Matt Carthy (Cavan-Monaghan, Sinn Fein)
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53. To ask the Minister for Finance when he expects to conclude a promised review into providing agricultural contractors with a similar status to farmers regarding the carbon tax on green diesel; and if it is intended to complete such a review prior to carbon tax increasing in 2022. [9371/22]

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.

My officials met with contractors' representatives in December 2019 and advised that my Department was intending to schedule a review of the scheme (and related aspects) in the context of a wider report on agri-tax reliefs and the Government's Climate policy. I have since received further correspondence from those representatives, most recently on 15 February last.

The onset of the Covid-19 pandemic in the intervening period caused the review to be deferred and it has yet to take place. In the meantime, the status quo has remained in relation to the application and scope of section 664A. As I advised the Deputy in December last, my Department intends to carry out the review, most likely in the first half of 2022.

It should also 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.

Finally, and 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 consistent with the need to meet our Climate Action Plan targets.