Approved Farmers Exempted From Income Tax


Farmers who qualify for an approved farmer status are entitled to relief and are exempted from the payment of income tax.
Director General of Tax Administration, Clive Nicholas, in reminding farmers of this provision, said the Approved Farmer Programme was introduced years ago as an incentive to encourage more persons to engage in farming activities.
Addressing a recent JIS Think Tank session the Director General said, “the tax system is very favourable to farmers”. He pointed out that to become an approved farmer, one would need to have two hectares (five acres) of land in productive activity to qualify.
The farmer must be engaged in so called prescribed agricultural activities which include: the cultivation of food crops, seed growing, cultivating trees for the production of timber, tobacco farming, fishing and fish farming, rearing beef and dairy cattle, horticulture, the production of fertile eggs for hatching and the production of table eggs and apiculture.
Mr. Nicholas pointed out that the programme was not open to persons who were casual in their approach to farming. “It (farming) cannot be something that you are not doing seriously and trying to make a profit,” he said.
Farmers wishing to benefit under the programme need to apply to the Rural Agricultural Development Authority (RADA) and submit their taxpayer registration number (TRN) and lease or title to the land used for farming.
Once the information on the application form has been verified by RADA, the request is sent to the Tax Administration Services Department and the Taxpayer Audit and Assessment Department before approval by the Minister of Finance.
Relief under the programme is for a period of ten years, however, the Finance Minister may grant an extension for another five years.
Mr. Nicholas explained that a substantial number of the people who were engaged in farming took advantage of the Approved Farmer Programme. He added however, that though exempt from income tax payment, approved farmers were still required to file their annual returns by the March 15 deadline.

JIS Social