Young farmers can get their grant of 40% or 60% under TAMS for slurry bags. Not being able to reclaim VAT on it, however, is making it more expensive and prohibitive for many farmers to install them, even though they are an excellent solution to slurry issues and problems on farms.

The stock answer to the effect that this is a matter for Revenue, which is independent, is not satisfactory. I have had a number of instances of correspondence from Revenue. I did not take the first answer I got and I pursued the issue, but I have made no progress. It is adamant slurry bags are moveable objects and are not VAT-debatable but I do not accept that. Will the Minister for Finance direct Revenue to carry out a proper categorisation of slurry bags and allow VAT to be reclaimed on them? This is a significant issue at a time when the periods of slurry storage are increasing and farmers are looking at cost-effective options for increasing their capacity. The issue needs to be addressed urgently.

I am not sure whether the prepared reply I am going to outline will give any further assurances to the Deputy but it is the response of the Department. The VAT treatment of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In accordance with the EU VAT directive, farmers can elect whether to register for VAT in respect of their farming business. Farmers who register for VAT have an entitlement to reclaim VAT on costs incurred in respect of the agricultural business. A farmer who has elected to register for VAT and charges VAT on supplies can claim a deduction for VAT incurred in costs used for the purposes of their taxable supplies. A VAT-registered farmer would be entitled to reclaim VAT incurred on slurry storage bags through his or her VAT returns.

Alternatively, farmers can remain unregistered and opt for the flat-rate farmer scheme. This scheme is a long-standing arrangement under VAT law that allows farmers who remain unregistered for VAT purposes to be compensated on an overall basis for the VAT charged to them on their purchases of goods and services. It allows such farmers to charge and retain a flat-rate addition to the sum they charge for the agricultural goods and services they supply in the course of their farming business. The flat-rate addition is calculated as a percentage of the sum payable to the farmer and is a matter of fact based on commercial agreements between the farmer and the customer. The scheme is designed to reduce the administrative burden for farmers and allows them to remain outside the normal VAT system, thereby avoiding the obligations of registration and returns.

Unregistered farmers may also be able to avail of a VAT refund on certain expenses allowed under their value added tax refund order of 2012. The VAT refund order allows for refunds to be claimed on outlay incurred on the construction of a farm building or structure, on the fencing, draining or reclamation of farmland and on the construction of equipment for the purpose of the microgeneration of electricity for use in the farm business. Revenue has advised, however, that outlay for other purposes such as slurry storage bags does not come within the scope of the refund order.

I want to raise the issue of the so-called broadcasting charge. In response to a parliamentary question I submitted, I was told on 22 March:

Government agreed to establish a Technical Working Group to examine the necessary reform required of the current TV licence system to properly provide for the funding requirements of public service media in Ireland. The Group commenced its work in September last year and is expected to report to me [the Minister] at the end of this month [March] after which the report will be considered by Government.

I am opposed to the current television licence system and I am opposed to a broadcasting charge that includes phones, laptops and so on. I am in favour of a digital tax on the digital media corporations that are making super profits in this State at the moment. I am also in favour of increased funding for public service media. Has that report been submitted yet to the Minister? If not, when does the Taoiseach now expect it?

As I outlined, in accordance with the EU VAT directive, farmers can elect whether to register for VAT in respect of their farming business. I take on board the point the Deputy made about larger farms being more inclined towards VAT registration, but for many small farmers, registering for VAT is an unnecessary complexity that is not possible to justify given the small-scale nature of their business. The farmer's flat-rate scheme, therefore, provided by the EU VAT directive is key to supporting such farmers. It is used by the majority of member states, including Ireland. The current rate for the flat-rate addition is 5% and this is reviewed each year in the run-up to the budget in accordance with the criteria set down in the directive. It is based on macroeconomic data, including the cost of agricultural inputs and production, as well as the prevailing VAT structures averaged out over the three preceding years. The rate for 2023 is based on data obtained from years 2020 to 2022.

Farmers who do not choose to register for VAT have an entitlement to reclaim VAT on costs incurred in respect of agricultural business. As I mentioned, a VAT-registered farmer would, therefore, be entitled to reclaim VAT incurred on slurry storage bags through their VAT returns. Farmers who are not registered for VAT are compensated for VAT incurred on goods and services used in the course of their farming businesses, including the purchase of agricultural equipment, through the flat-rate addition they receive on payments for their supply of agricultural produce and services. Unregistered farmers can also reclaim VAT for the construction, extension, alteration or reconstruction of a building or structure designated for use solely or mainly for the purposes of farming businesses. However, this cannot be extended for other purposes such as slurry storage bags, given Revenue has advised they do not come within the scope of the refund order.

The Deputy could have this conversation with the Minister during the discussions for budget 2024, although I will certainly raise the matter with him on his behalf.