FDII Outlines Budget 2017 Recommendations Including Support For Irish Dairy Industry

The FDII has launched its submission to be considered by the Irish government ahead of next year's budget, including outlining its argument as to why a soft drinks tax should not be introduced.

 

The sugar tax is being considered being introduced next year as part of a range of measures to tackle Ireland's growing obesity problem.

 

In its submission, the FDII said such as tax amounts to an "additional tax" on people, added to the 23 percent VAT rate.

 

Furthermore, it said the tax has been proposed to be introduced without consultation from the drinks industry and "with no recognition of industry’s own efforts to reformulate and provide choice”.

 

It also said there was no evidence that sustained reduction in consumption of soft drinks is achieved through a sugar tax.
The FDII said: " A price-hike will inevitably cause an increase in cross-border and illicit trade in these products.”

 

“This will damage Irish businesses and jobs while creating a highly unstable revenue stream at best, and potentially one which yields no net contribution to the exchequer."

 

The FDII is in tune with the Irish Beverage Council (IBC) which has warned that a sugar tax won't have any health benefits and will increase the average grocery bill by €60 ($68) annually.

 

Further recommendations put forward by the FDII include measures to help the Irish agri industry, against the backdrop of Brexit and a significant
weakening of sterling.

 

Over 40 percent of Ireland's agri food exports go to the UK, with 60 percent of its cheddar exports going to the UK.

 

To help the industry, the FDII is recommending "budgetary taxation tools" such as initiating fixed priced contracts to help the Irish agri industry.

 

The FDII said: "It is imperative that farmers and companies are treated fairly in tax calculations around these income stabilising tools.”

 

FDII Director Paul Kelly said: “Budget 2017 must support industry efforts to maintain our markets in the UK as well as ensuring that in the domestic market, food companies remain competitive against imports and the threat of cross-border shopping.”

 

“To do this we need to stay competitive and keep business costs under control. At a time of such uncertainty government also needs to avoid ill-considered public health measures such as soft drink taxes and focus instead on supporting industry efforts in product innovation and workplace wellbeing”

 

Further proposals include:

 

• Tax measures to support SME growth and innovation and ensure level playing field with UK
• A seed enterprise investment scheme
• Capital Gains Tax entrepreneurs relief
• An improved R&D tax credit model
• Increased funding for enterprise led training and up-skilling initiatives
• Re-allocation of National Training Fund to be more employer/employee focussed
• Increase the level of Skillnets funding
• Invest in the new Apprenticeship model
• No additional tax on soft drinks
• Supports for a competitive dairy sector
• Incentivisation of workplace wellbeing initiatives
• Tax credits for workplace wellbeing initiatives
• Gym and sports membership to be excluded from Benefit in Kind taxation
• Supports for 5 a day fruit and vegetable at work scheme