The hike in the carbon tax of €7.50/t will cost contractors €13,455 per annum, according to the Farm and Forestry Contractors association (FCI).
“The increase of €7.50/t in carbon tax, which brought the carbon tax penalty for contractors to €33.50/t, will mean that farm and forestry contractors suffer an unfair carbon tax burden of €13,455/annum,” the FCI said.
It said this was based on a typical use level of 150,000 litres of annual diesel consumption.
They are also unable to avail of any rebate scheme
FCI national chair John Hughes said despite the fact that the modern machinery used by contractors also consumes costly AdBlue fuel additives to reduce emissions, FCI members are unable to have the benefit of the double taxation carbon tax relief which is provided to their farming customers.
“They are also unable to avail of any rebate scheme, which has been put in place for road haulage operators,” he added, “despite these additional operating costs to lower emissions through the use of AdBlue system.”
FCI had called on the Minister for Finance to seriously consider the option of offering a zero VAT on all farm and forestry contractor services or to allow a full VAT refund for non-VAT registered farmers.
It said this can be offset by the creation of a ring-fenced fund, sourced by the many millions of euros of unclaimed carbon tax credits, currently not being claimed by farmers under the carbon tax double taxation benefit.
There has been enough damage done to the contracting sector so far
“We cannot have a situation into the future where the carbon tax contributions from the fuel bills of farm and forestry contractors are being used to grant aid farmers to buy machinery so as to put contractors out of business.
“There has been enough damage done to the contracting sector so far with the current unfair approach to grant funding of Low Emission Slurry [Spreading] (LESS) that excludes contractors, this cannot be repeated,” he added.
Passing it on
Hughes said FCI members will have no option but to pass on the carbon tax cost increase directly to farmer customers.
“This will equate to almost a 14% increase for all farm and forestry contractor current annual charges turnover levels of more than €700m paid for by Irish farmers,” he said.
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