Fertiliser taxes - implementation issues

November 26, 2004

News

26/11/2004

 

Fertiliser taxes - implementation issues

Embargoed until 00:01 hours, Friday 26 November 2004



This paper, by Sue Scott (ESRI), will be presented at the ESRI workshop entitled "Trickle or treat - Water quality, investment and pricing", on on Friday, 26 November, 2004, from 0900-1300, at the ESRI Offices, 4 Burlington Road, Dublin 4.



The VAT system could be a means of encouraging balanced inputs and outputs of fertiliser nutrients to suit the soil, according to the report Fertiliser taxes - implementation issues, prepared for the Environmental Protection Agency by Sue Scott of the ESRI.



Reducing damage to Ireland’s waterways requires sensitive fertiliser application that carefully matches how much fertilisers are applied to suit the soil’s requirements. Sensitive fertiliser application takes time and effort on the part of the farmer. Without this care, nutrients can be in excess of plants’ needs. They end up in waterways, in particular, which become damaged. Thus the environment provides farmers with a “free” sink and society bears the damage.



All our large lakes could be under threat unless the loss rates from fertilisers are substantially reduced, according to a recent Environmental Protection Agency report, Ireland’s Environment - 2004.



The two key issues are sensitive application of fertilisers and incentives.



This report considers:

 

 

  • The damage that is attributed to fertilisers
  • The reasons this is likely to happen
  • Experience abroad with tax incentives to encourage sensitive fertiliser application
  • Options for tax policies in Ireland
  • Income effects and environmental impacts
  • The VAT system and (a) book-keeping synergies for checking nutrient balances on VAT-registered farms, (b) with respect to other farms, the net tax on those that apply above average amounts of fertiliser.

The report, Fertiliser Taxes – Implementation Issues, by Sue Scott will shortly be published by the Environmental Protection Agency, Johnstown Castle, Co. Wexford. The report was prepared as part of the Environment Research and Technological Development and Innovation (ERTDI) Programme under the Productive Sector Operational Programme 2000-2006.