Latest news with #PaschalDonohoe
Irish Examiner
2 hours ago
- Business
- Irish Examiner
Flat-rate Vat removal to cost average broiler farm €12,000 a year
Removal of flat-rate Vat may cost the average poultry broiler farmer more than €12,000 per year. The Revenue Commissioners have said overcompensation of all flat-rate farmers involved in chicken production amounted to about €7 million in 2017. Revenue considers that the yearly overcompensation is approximate to the level identified in 2017, and it continued since then. The average overcompensation is around €12,500 per year, if the 560 or so poultry breeding, hatching and rearing farms in Ireland are included. The flat-rate scheme compensates farmers, that are not Vat-registered, for the Vat incurred by them on input costs used in the course of their farming activities. This is achieved through the addition of a flat-rate percentage (currently 5.1%) to the price charged by the farmer for their supplies to Vat-registered persons (such as a meat-processing business, in the case of poultry). The flat-rate scheme also reduces farmers' administrative burden of registration and returns. The scheme is provided for under EU legislation. However, a key element is that it should not lead to farmers being overcompensated for Vat incurred by them on their business costs. Following an investigation in 2018, Revenue determined that there was a significant amount of overcompensation in the poultry sector. The matter was re-examined over the last 18 months, and it has been determined that overcompensation is still occurring. This resulted in finance minister Paschal Donohoe's recent decision to remove the sector from the scheme. From September 1, 2025, farmers in the poultry (broiler) sector will not be able to charge the flat-rate addition on the sale of their goods and services. Instead they will be required to register for Vat, if the level of their poultry broiler business is above the relevant Vat registration threshold in order to claim back Vat on their inputs (but farmers can register for Vat even if they are operating below this threshold). The Vat registration thresholds are €42,500 for services and €85,000 for goods. Minister Donohoe said he is required to have regard for the welfare of all farmers who avail of the scheme (more than 85% of Irish farmers avail of the flat-rate scheme). "As the EU Vat Directive does not permit overcompensation, failure to take this action could undermine the integrity of the scheme as a whole". I understand the concern this will cause amongst impacted farmers, and want to emphasise that every effort was made to find a resolution for our poultry sector. However, this matter has come to a head and must be addressed. "I have asked Revenue to provide the appropriate level of assistance and guidance on this matter to the affected farmers. In this regard, queries can be directed to businesstaxesregistrations@ IFA Poultry Chair Nigel Sweetnam said the decision to exclude a single sector is unprecedented. He said most broiler poultry farmers also have suckler, beef, dairy, or sheep enterprises, and this complexity will make compliance with the new Vat rules more difficult, as the farmers must separate their farm enterprises for Vat purposes. The change could possibly be the first of many in Vat for farmers. Accountants say no clear intention in Vat modernisation has been published by Revenue, but it is likely that all farmers could eventually fall into the Vat net over a number of years. Following a complaint about the poultry sector, Revenue undertook a comprehensive review in 2018 to establish if there was evidence of overcompensation. This review, provided to the minister for finance in 2019, established that there was a very significant overcompensation. Due to other factors, including Brexit and the covid-19 pandemic, this matter was not further considered until July 2023. Officials in the Department of Finance and Revenue said additional information provided by the sector indicated that while the overcompensation had reduced from the initial Revenue report, it was still quite significant. Together with the CSO, they investigated the possibility of creating a sector-specific flat-rate percentage for the poultry broiler sector. Unfortunately this was not possible, but if it is developed in the future, the sector could be reinstated within the flat-rate addition scheme. The poultry broiler sector has about 430 chicken farms, and 32 duck and 100 turkey farms and produces 170,000 tonnes of poultry meat. Read More Is it the thin end of the wedge for flat rate Vat compensation scheme?
Irish Examiner
2 hours ago
- Business
- Irish Examiner
Relief for the industry or a blow to public health: Mixed reaction to delayed health warnings on alcohol
There was a mixed reaction to the Government confirming it would delay putting health warnings on alcohol products, from 'breathing space for a sector under pressure' to 'a blow for public health in Ireland'. At Cabinet on Tuesday, ministers heard that the introduction of health warnings on alcohol labels was being delayed by two years after concerns were raised about the impact of their implementation in the current global trading environment. It comes against the backdrop of fears for Irish business from US trade tariffs propagated by President Donald Trump, with Fine Gael ministers in particular such as Paschal Donohoe and Peter Burke raising concerns in recent months. Part of the landmark Public Health Alcohol Bill, which has seen the introduction of minimum unit pricing and advertising curbs, the measure will now proceed next year as planned but at a 'more appropriate time', Cabinet heard. Ibec organisation Drinks Ireland welcomed the move and said it provided 'much-needed relief' for drinks producers in this country. 'Our members are currently contending with major trade uncertainty, new tariffs on product entering our most important export market, the US, and threats of further tariff escalation,' it said. 'In these uncertain times, companies must be as competitive as possible to survive in international markets. This means tackling regulatory burden and reducing costs for producers.' It claimed that commentary that the now-deferred changes would not impact exports, as the labelling requirement would only have applied here, was 'misguided and disingenuous'. 'The introduction of supplementary requirements uniquely for the Irish market would have placed additional pressure on all companies operating here, and this would of course be more pronounced for SMEs,' it added. The move was also welcomed by the Irish Whiskey Association, which called it a 'reprieve' as some members would have seen packaging and labelling costs increase by over 35%. Meanwhile, Alcohol Action Ireland said it was disappointed by the Government's decision and said the measure was aimed at informing consumers about the health risks that come with alcohol consumption. 'It's not just that the government is allowing its own groundbreaking legislation to be undermined by the very industry it is designed to regulate,' its CEO Sheila Gilheany said. This delay will have real-life consequences that will be felt by ordinary Irish people every day. Labels are crucial to efforts to reduce incidences of cancer, liver disease, and foetal alcohol spectrum disorder in Ireland and indeed to change the conversation about this product which is heavily marketed as risk-free and essential to everyday living.' Ms Gilheany added that the step-by-step approach to implementing aspects of the Public Health Alcohol Bill has been slow and allowed a space where misinformation has flourished. She also criticised the failure to date to introduce stricter curbs for advertising allowed by the law, which would restrict the content of such adverts to 'facts, stripping out the industry myths which are used to recklessly promote alcohol consumption'.
Irish Times
9 hours ago
- Business
- Irish Times
Big spending package advanced despite warnings on numbers becoming tighter
The summer economic statement is normally the Government's key piece of communication before the budget. But this year's comes with a serious health warning. The numbers may be revised, we are told, if the economy is hit by further tariffs. And the tariffs in place already and the Government's budget plans mean that the surplus next year will be 'considerably smaller' than the €6.3 billion anticipated in the forecasts published during the spring. The numbers, in other words, are getting tighter. In this context, it is notable that the Minister for Finance Paschal Donohoe and Minister for Public Expenditure Jack Chambers , put forward a planned budget package of a still relatively generous €9.4 billion, including a tax package of €1.5 billion. Spending growth is pencilled in at 7.3 per cent, with a 6.4 per cent rise in day-to-day spending. This may be a reduction from the average of 9.4 per cent-plus seen on average since 2019, but it remains well in advance of inflation. READ MORE Current spending is due to rise by 6.4 per cent next year. In recent years there have been regular overruns and this will be the case again in 2025. Importantly, the Ministers warned that the figures will have to be revised if the tariff situation worsens, as it may well do. So we will have to wait and see what level of tax revenue growth is anticipated next year and what budget surplus the Department of Finance anticipates. [ Tax and spending package of €9.4bn to form basis of Budget 2026 Opens in new window ] This is what will determine whether the budget numbers need to be adjusted – and if so, by how much. In recent years, the basic package has also been extended significantly on budget day by a cost-of-living package, including once-off measures. We are told this will not feature this year, probably. Battles may still lie ahead here. David McWilliams on how 'big incentives' to build could save Dublin city Listen | 36:51 If there is a need to adjust the figures, we are told that protecting capital investment and the large €102 billion five-year programme outlined in the revised National Development Plan will be the priority. Large cuts to State investment during the austerity years after the financial crash have cost the Republic dear. That said, if there is a need to revise the figures, there will surely be tensions. As things stand, some €850 million of the €1.5 billion tax package will be eaten up by the promised cut in the hospitality VAT rate. This will leave small pickings for income tax cuts, unless revenue is raised elsewhere. Applying the VAT cut to just food-based firms, while administratively difficult, would save some of the cash. But political difficulties loom here. [ NDP: €275bn spend over next 10 years, with housing receiving biggest boost Opens in new window ] The big questions will, however, be about expenditure. Restoring control over day-to-day spending will be a big challenge. And if the budget numbers tighten, then the State will face the choice of borrowing to finance its increased investment plans. In the middle of all this is the commitment to billions into two funds each year, to help pay future bills. We still have to see how the Department of Finance sees all this fitting together. The summer economic statement, bar its indications of the budget day package, did not take us much further, except for a warning that if a trade war erupts, then all bets are off.
The Journal
16 hours ago
- Business
- The Journal
Metrolink gets €2 billion funding boost - but no one knows what the final cost will be yet
THE METROLINK PROJECT is set to get a €2 billion boost in funding under the National Development Plan (NDP) – but the full cost of the long-planned underground rail line is not yet known. The plan, which was announced by the Government this afternoon , sets out what large-scale infrastructure projects Ireland needs over the next five to ten years. It details plans to invest €24.33 billion in transport between next year and 2030. Of this, €2 billion will come from the Infrastructure, Climate and Nature Fund (ICNF). The government said this funding is being allocated to support the development of 'low-carbon transportation' projects such as the MetroLink 'before 2030″. According to the plan, the government has decided to fund the proposed Dublin rail link using the ICNF due to the 'unique scale' of Metrolink, which it said will allow 'the ambitious pipeline of other public transport projects'. The Metrolink, which is the single biggest public transport project in the history of the State, will have 16 stations running from Swords to Charlemont and is estimated to carry 53 million passengers annually. The 18.8km route will have an end-to-end journey time of 25 minutes and serve residential areas including Ballymun and Glasnevin, as well as the City Centre and Dublin Airport, and will link to Irish Rail, Luas and bus services. Speaking this afternoon, Taoiseach Micheál Martin said that today's funding announcement was 'a very definitive commitment to the metro'. He said that while the actual cost of the project will be 'very, very substantial', the coalition is very clear that is has to be built 'for the future of the country'. 'If you look at the expansion of Dublin, if you look at it over 20 to 30 year period, there will be continued growth in population in Dublin. I don't think you could sustain Dublin without a metro,' he said. The Metrolink will have 16 stations running from Swords to Charlemont. Metrolink Metrolink In a later press conference, Finance Minister Paschal Donohoe indicated that the most recent costing for delivering the Metrolink is around €11 billion. He said the reason why an exact estimate for the cost of the project cannot be given is that there is now a procurement process due to commence. 'I'm not going to indicate what we believe the final cost will be until the procurement process is complete,' he said, stating that to do so beforehand could influence the value for money aspect of 'what it is a very, very big project'. The point was made to the minister that the public might find it hard to believe that the Metrolink will be delivered when there have been so many promises made about it over the last decade. Advertisement Donohoe accepted the point, but added that much of those decisions were influenced by the aftermath of global financial crisis, when capital investments was at a very low level. 'We tried to rebuild it, but it did take time, and we weren't able to give confidence regarding the money that would be available for projects like the Metrolink,' he said. 'There's only a very small number of projects that the government has given a particular commitment to and they are mega projects. They're in water and they're in transport. The main project that we are giving a commitment to up front is the mega project of the Metrolink. Planning An underground rail line for Dublin was first proposed in a government plan in 2005, but was shelved for several years during the recession. Cabinet approved a refreshed plan for the Metrolink in July 2022, with a planning application submitted to An Bord Pleanála that September. The current route of the Dublin Metrolink. Transport Infrastructure Ireland (TII) lodged a Draft Railway Order seeking permission for the project in 2023 and received 318 submissions in response. An Bord Pleanála – now called An Coimisiún Pleanála – held oral hearings to facilitate third parties expressing their concerns around the project early last year. During these hearings, further documentation was submitted, which resulted in a second public consultation process being held from August to October last year. A decision on whether to grant planning permission is now awaited from An Coimisiún Pleanála, with the Irish Times reporting on Saturday that the decision is due before the end of the summer. It's now expected that construction may not begin until at least 2028 . In 2021, the Metrolink was estimated to cost between €7 billion and €12 billion. Sean Sweeney, the director of Metrolink, told an Oireachtas committee in May that that estimate 'is going to change'. Speaking to RTÉ News this week, Sweeney said that the full cost of the project will not be clear until 2027 until tenders for the project are received. Asked today why people should believe the government when some €300 million has already been spent on the project and building has yet to commence, the Taoiseach said this money was spent on 'preparation' for the project. Artist interpretation of the underground station at Tara Street on the Northside of the city. 'You just don't go to a planning commission without substantial investment, ' Micheál Martin said. He said these are 'enormous projects' which demand a lot of allocation in terms of the work that goes into planning, designing the route and preparing a planning application, adding: 'So actually, I would take the €300 million as evidence of our commitment to building the Metro.' Related Reads Construction of MetroLink project may not begin until 2028, transport committee to hear Ireland is wasting a golden Green Line opportunity to appease misguided south Dublin fears 'I had death threats': MetroLink boss foresees pushback but also huge benefits in store Martin was also asked if the projects planned for in the NDP would go ahead if there is an economic slowdown, particularly as a result of US President Donald Trump's 30% tariff threat. The Taoiseach said that the international investment community is needed for projects at the scale of the Metrolink. 'They need to realise that we're going the full distance on the capital, and we will take measures if we have to, obviously, to meet the impacts of tariffs. But we are very clearly signaling that, unlike previous times, we want to protect the capital side of the equation.' Asked again if the spending would take a hit, he added: 'Current spending will be under pressure if such a situation was to emerge.' Reaction Fianna Fáil Senator for Dublin Fingal West Lorraine Clifford Lee said today's funding commitment of €2 billion is 'a statement of intent' from the government for a project that she said is 'essential' to meet the needs of a growing population. She said there has been an explosion in population in north County Dublin, in areas such as Balbriggan, Rush, Lusk and Swords, which infrastructure has not kept up with. 'There's always a chorus ready to kill a big idea before it starts, but we cannot base national planning on unverified cost fears,' she said. 'Final costs for Metrolink will come through the tendering process, and that's still to come. Let's be clear: this is a transformational project, and its long-term value far outweighs the short-term noise.' €2bn for Metrolink is hardly a vote of confidence that the project will be substantively progressed in this decade. It's supposed to take 6 years & be operational in early 2030's. €2bn is only 8%- 16% of the estimated total cost. #Metrolink — Marie Sherlock TD (@marie_sherlock) July 22, 2025 Fine Gael TD for Dublin North West Grace Boland also welcomed the ringfenced funding for the Metrolink, which she said is 'essential to get the project off the ground and marks a significant step forward'. However, Labour's transport spokesperson Ciarán Ahern said the €2 billion 'does not represent the scale or urgency required to deliver the long-awaited rail project for Dublin'. 'Metrolink is supposed to be the country's flagship public transport project and €2 billion is no small sum, but in the context of the overall cost of the project, it's nowhere near enough. We're talking about a fraction of what's actually required to see this project through,' he said. Ahern added that it is 'long past time that the sod was turned on Metrolink' and called on the government to commit the full funding required for the project. Sinn Féin's transport spokesperson Louise O'Hara meanwhile said the fact that the plan made funding commitments to the Metrolink but failed to mention any specific projects in the western and northern region is 'deeply disappointing'. With reporting from Christina Finn Readers like you are keeping these stories free for everyone... A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article. Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation. Learn More Support The Journal
Irish Times
18 hours ago
- Business
- Irish Times
Budget plan for €9.4bn public spending boost will be reconsidered if tariffs hit
Plans to spend an extra €9.4 billion on public services , tax cuts and building projects next year will be reconsidered if the US imposes tariffs on EU imports, Minister for Finance Paschal Donohoe and Minister for Public Expenditure Jack Chambers said on Tuesday. But they, along with Taoiseach Micheál Martin and Tánaiste Simon Harris , pledged that if there is pressure on spending plans, they would protect infrastructure budgets and cut growth in current spending on public services, welfare and tax cuts to realise the necessary savings. The Coalition leaders launched a review of the National Development Plan (NDP), promising to spend €100 billion between now and 2030 – a €30 billion increase over what was planned – to improve water, energy, transport and housing infrastructure. [ National Development Plan shows the Government is about to bet big on capital expenditure Opens in new window ] The ambitious plans were overshadowed by the threat of a trade war between the European Union and United States, which Mr Donohoe and Mr Chambers admitted could compel them to revise plans published on Tuesday for a budget day package of €9.4 billion in October. READ MORE In the event of high tariffs, the Government would 'recalibrate its fiscal strategy' and reduce the budget package to keep public finances stable, said Mr Donohoe. Already, the plans for October's Budget 2026 envisage growth in public spending being trimmed from 8-9 per cent of recent years to 6.4 per cent next year. Mr Donohoe said there would be a package of tax cuts of some €1.5 billion. But he added that the cost of cutting VAT on hospitality – a Fine Gael election promise included in the programme for government – would amount to nearly €1 billion in a full year, meaning the scope for any tax adjustments to rates and bands would be reduced significantly. Tariffs: Why has Donald Trump threatened the EU again? Listen | 47:35 'It would not be right to grow the scale of our tax package,' said Mr Donohoe. The Coalition published the amended NDP and summer economic statement at Government Buildings on Tuesday. The NDP promises expenditure of €25 billion on capital projects in 2026, with the amount increasing every year and peaking at €28 billion in 2029. The total is set to reach more than €100 billion by 2030. The plan was immediately criticised for not identifying individual projects, though the Government did point to a small number of 'megaprojects', including the Dublin Metro and two big water schemes: the Shannon to Dublin water supply project and Greater Dublin Area drainage initiative. Social Democrats spokesman on public expenditure Cian O'Callaghan said the plan is 'so vague it doesn't even rise to the level of wish list'. Sinn Féin 's health spokesman David Cullinane said the allocation for health falls 'far short of what is needed' over the next five years. Labour 's Marie Sherlock, meanwhile, has said the €2 billion allocated for the MetroLink is 'hardly a vote of confidence that the project will be substantively progressed in this decade'. The summer economic statement, normally a key document in the preparation of the October budget, was considerably shorter and less detailed than usual. It contained several warnings, however, about threats to the State's public finances from several sources. [ NDP shows Government about to bet big on capital expenditure Opens in new window ] 'Even before the full impact of tariffs takes hold, it is increasingly evident that heightened levels of uncertainty have prompted firms to delay investment plans and households to step up precautionary savings. These headwinds are set to slow the pace of economic expansion,' it said. The document also warned that the 'headline surplus is now likely to be considerably lower than set out in the spring'. It flagged that spending pressures in several Government departments will require additional funding above their agreed allocations, prompting Mr Chambers to warn of the need for spending discipline and an end to bailouts in the second half of the year – a now familiar necessity in some departments.
