Politics General Audit Chamber
'Adjust or abolish agricultural exemption'
As a result of the agricultural exemption, the national government is missing out on €682 million annually. The exemption has been a regulation without a clear purpose for 20 years and has resulted in tax unequal treatment of landowners-lessors and landowners-farmers. The Court of Audit concluded that the exemption should therefore be amended or abolished.
Abolition can have a negative effect on the financing of business transfers in the family sphere and the amount of agricultural land traded, the Court of Audit notes.
The audit office is investigating whether the central government is handling public money properly. In the annual so-called accountability survey about the Ministry of Agriculture, the General Audit Chamber that agriculture minister Carola Schouten has little time to critically examine old regulations. She is too much absorbed by urgent matters, such as the nitrogen and corona crisis.
First a tax goal
For example, the agricultural exemption, which was introduced in 1918, had a fiscal purpose in income and corporate tax until 2001. That came to an end that year with the change in the income tax system. "The agricultural exemption has therefore been an instrument without a clear purpose for 20 years." The budget loss on the national budget due to the use of the exemption is estimated at €2020 million for 682.
Users of the scheme are entrepreneurs who conduct an agricultural business on their own land. These are businesses with a strongly land-based character, such as arable farming and livestock farming. By applying the agricultural exemption, the selling entrepreneur does not pay any profit tax on the 'inflation profit' on his agricultural land.
Unfair treatment
"Continuation of the agricultural exemption under the system of the Income Tax Act 2001, is a fiscally unequal treatment of landowners-lessors and landowners-farmers with regard to the change in value of their (agricultural) lands", the Court of Audit states. The landowners-lessors are taxed via the capital yield tax on the fixed return that they (are expected to) achieve with their (agricultural) land. The agricultural exemption still applies to landowners-farmers.
The Court of Audit recommends that a decision be taken to adjust or abolish the agricultural exemption.
Unclear control policy for remediation of pig farms
In its report, the Court of Audit also draws attention to the control policy for the reimbursement of pig rights in the context of the Subsidy Scheme for the Remediation of Pig Farms. "We note that there is no clear and complete description of this control policy. Parts of the control policy are described in various documents, but an overarching description is missing," the Court of Audit reports.
The institute also sees differences between the partial descriptions of the control policy. "Due to these differences, it is not clear to what extent equal treatment of pig farmers is guaranteed. We also have doubts about the information on which RVO bases the subsidy. application, supplied by the pig farmer himself." The recommendation is to draw up a complete process description for the reimbursement of pig rights in the context of the Subsidy Scheme for the Remediation of Pig Farms.
The minister also forgot to inform the Senate in good time about support for floriculture, the French fries sector, fisheries and aquaculture. According to the Court of Audit, this expenditure is therefore unlawful in principle.
Linda van Eekeres
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