More Tax Possibilities for Farmers

January 5, 2009 New Zealand Taxation  No comments

Federated Farmers are hesitant about the new National Animal Identification and Tracing scheme (NAIT), claiming that it could lead the way for further carbon taxes being imposed upon their sheep stocks.

The NAIT scheme proposes to ear tag all farmed deer and cattle. The major claimed benefit of the scheme is the traceability it provides for all products from the animals. Other benefits extend to reduced response times to diseases outbreak, supposed improvement of farm efficiency and increased consumer confidence. As the scheme stands now, sheep are not included in the animals set to be tagged but the probability of it happening are high.

As the NAIT scheme allows for the government to determine the exact number of animals on any farm there would be no difficulty in imposing a levy on each animal. The tax would be penned with the aim of combating emissions, specifically methane produced by the animals.

Estimates have placed methane emissions as accounting for almost half of the greenhouse gases produced by New Zealand. It is planned for them to be included in the New Zealand emissions trading scheme by 2013. Although, the scheme is currently under review of the new national Government.
Federated Farmers spokesperson, Lachlan McKenzie, claimed that the national average for a sheep farm’s yearly income is only $20,000. As such any levies on emissions, as currently charged at $25 per year per tonne, would see that profit become negative, or more specifically at a level of negative 160%.