The Government accelerates to launch a lifeline to the agricultural sector that is already beginning to suffer the effects of the drought. The Ministry of Finance has today published an order in the Official State Gazette (BOE) to reduce by up to 50% the net return rates applicable in 2022 in the objective estimation system of Personal Income Tax ( IRPF), the so-called system of modules, for farmers and ranchers. In turn, the Ministry of Agriculture is working on a decree with direct aid.
The order establishes a general reduction in net yield of 25% that may be applied to the approximately 800,000 farmers and ranchers who are taxed by the module system, reports the Executive through Agriculture. Some sectors, the most affected at this time by the lack of rain, will have specific reductions, which are 50% in the case of olive groves, almond trees and beekeeping, and 30% for cereals, oilseeds and legumes, chestnut, peach , nectarine, apricot and other livestock sectors.
Although the drought is widespread, the most affected areas at the moment are the interior of Catalonia, where there are more than 70,000 hectares of fruit trees, and the Guadalquivir, Guadiana and Segura basins. The forecasts, moreover, do not invite optimism. The State Meteorology Agency (Aemet) confirms that the average value of accumulated rainfall since the beginning of the hydrological year, which began on October 1, 2022, is 23.5% lower than the normal figure.
The Treasury estimates that the tax reductions published this Tuesday in the BOE represent a reduction in the tax base of the order of 1,807 million euros, the most far-reaching in the last decade.
The order also allows declarants in an objective agricultural estimate of personal income tax to reduce the previous net yield by 35% for the purchase of agricultural diesel, and 15% for the purchase of fertilizers, as established in Order HFP/1172/2022, of November 29, which develops the objective estimation method of personal income tax for 2023.
In addition, the reductions in the corrective indices that were established last year for feed purchased from third parties and for crops on irrigated land that use electricity are maintained. Specifically, the index applicable to livestock activities that feed livestock with feed and other products purchased from third parties is established at 0.5, provided that they represent more than 50% of the amount of food products consumed, and applies to both the sectors intensive and extensive farmers. The correction index for crops on irrigated land that use electricity is reduced to 0.75.
The reductions in the net performance indices established nationally for the 2022 income statement of the agricultural sectors are from 0.26 to 0.18 for cereals, legumes and oilseeds; from 0.26 to 0.13 for the olive tree; from 0.37 to 0.26 for apricot, peach and nectarine; from 0.26 to 0.13 for the almond; and from 0.26 to 0.18 for the chestnut.
In the case of livestock, the reduction remains at 0.09 for poultry, 0.14 for dairy cattle, 0.09 for meat and 0.18 for breeding; at 0.09 for rabbit farming; at 0.22 for the horse; 0.09 for sheep and goat meat and 0.18 for milk; at 0.09 for meat pigs and at 0.18 for breeding; and 0.13 for beekeeping.
The Treasury order includes a reduction in these indices due to the current drought situation and also takes into account other exceptional situations that during 2022 affected a significant number of agricultural and livestock farms during 2022, such as the war in Ukraine, which caused an increase in prices of production costs.
