The BOE publishes the new order of tax cuts seeking to offset the sector’s loss of profitability due to the pandemic and the climatic setbacks of 2021
After two years of pandemic and 2021 marked by bad weather – the Filomena storm in January, frost in March and lack of rain throughout the year – the loss of primary sector profitability will be partially offset by a tax cut. This Wednesday, the Ministry of Finance published in the BOE the order of IRPF 2021 modules with a tax cut for the 900,000 farmers and ranchers taxed by modules of approximately EUR 1,093 million.
The reductions in modules approved at the proposal of the Ministry of Agriculture translate into a proportional reduction in the tax base derived from the income from agricultural activities. This cut comes in addition to the 20% cut in net yields approved for the entire agricultural sector in the government-approved anti-crisis plan to mitigate the effects of the drought and the increase in production costs caused by the war in Ukraine.
In addition, the rate that applies to livestock farming activities in which animals are fed with feed and other products purchased from third parties will be reduced, provided they represent more than 50% of the total amount of feed. It is estimated that the reduction for this concept can amount to 38 million euros. The uniform rate for all livestock sectors will be 0.50.
Likewise, and in an extraordinary way because of the difficulties of the situation, the reduction of the corrective coefficient for the use of electricity for irrigation applied in previous years is extended by 5 points, according to the text published in the BOE. For example, farmers using electricity for irrigation will benefit from a 25% reduction in net yield for irrigated crops (the previous year was 20%), extendable to all irrigation, not just seasonal consumption. It is estimated that this measure will result in a reduction of approximately 39 million euros.
The industry welcomed this cut, although they require Asaja to comply with the obligation to draft contracts considering the two different powers depending on the needs of the irrigation supply, especially now that electricity costs have “risen” and are “prohibitive.” are for farmers, they say in a statement.
The reductions established with a state character for the 2021 income statement are as follows:
– Grape for wine with DO from 0.32 to 0.22
– Grape for wine without DO from 0.26 to 0.18
– Poultry from 0.13 to 0.09
– Dairy cattle from 0.20 to 0.14
– Beef cattle from 0.13 to 0.09
– Breeding from 0.26 to 0.18
– Cuniculture from 0.13 to 0.09
– Horses from 0.32 to 0.22
– Mutton and goat meat from 0.13 to 0.09
– Dairy sheep and goats from 0.26 to 0.18
– Pork or from 0.13 to 0.09
– Breeding pig from 0.26 to 0.18
– Beekeeping from 0.26 to 0.13
Source: La Verdad
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