Saatja: "Raymond O'Hanlon" <
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Teema: Concerns over Illegal State Aid in Ireland
Kuupäev: 2025-08-01 14:43
Tähelepanu! Tegemist on välisvõrgust saabunud kirjaga.
Tundmatu saatja korral palume linke ja faile mitte avada.
Dear Minister,
Recent disclosures—both through public studies and Freedom of Information
records—reveal longstanding and systematic abuse of VAT mechanisms in
Ireland’s farming industries. These abuses extend well beyond the relatively
small Broiler Sector which has been in the news in recent weeks and raise
serious questions about illegal state aid, ministerial oversight, and the
credibility of fiscal governance within the Single Market.
A 2018 study by the Irish Tax Authority (Revenue) found that flat-rate VAT
payments to Broiler farmers exceeded their input VAT costs by between 470%
and 1,000%, depending on their trading structure. This disparity reflects
not efficiency, but evasion—especially where fraudulent co-operatives were
used to artificially inflate payment streams. Despite being informed of
these findings during his term as Finance Minister, Mr. Paschal Donohoe did
not act until July 2025, announcing the removal of the Broiler Sector from
the Flat-Rate Addition Scheme only from September 1, 2025.
This delayed and limited intervention is deeply troubling when viewed
against the wider context. Internal Revenue briefings obtained via Freedom
of Information clearly state: “Abuse of flat-rate addition [fraud] happening
in certain sectors. Example includes avoidance [evasion] in the poultry
industry…” The plural “sectors” and the specific mention of pricing tactics
used by processors are indicative of a broader problem—one that officials in
both Revenue and the Department of Finance were well aware of. Yet only the
Broiler Sector was excluded. This selective enforcement appears designed to
placate DG Taxation while preserving systemic funding mechanisms leveraging
VAT fraud for a small number of privileged processors.
Indeed, the use of VAT abuse as covert state aid aligns with strategic goals
laid out in the Government’s 10-year agricultural plan of March 2000, which
called for a reduction in poultry processors from 23 to 7. The forced
closure of independent enterprises such as Cappoquin Poultry Plant in
2013—where I served as Managing Director and shareholder—completed this
consolidation. A mechanism that was supposedly designed to simplify VAT
accounting for small farmers was instead weaponised against them to serve an
industrial policy.
Concerns over this practice date back to 2014, when Mr. Alo Mohan, then
Chair of the IFA’s National Poultry Committee, flagged abuse to Revenue on
advice from the IFA’s Chief Economist. After being marginalised and put out
of business for his intervention, Mr. Mohan—with support from MEP Marian
Harkin—escalated the issue to DG Taxation, which conducted a pilot
investigation. The Government responded not by reforming the scheme
outright, but by introducing Section 86A of the VAT Consolidation Act 2010,
permitting selective exclusion of a sector where it became impossible for it
to sustain systemic fraud any longer.
Even before the exclusion of the Broiler sector comes into force, farmers
are being advised by the IFA that they may remain in the flat-rate scheme
for other enterprises—leaving the door open for fraudulent workarounds and
the perpetuation of funding models that distort fair competition. This
raises fundamental questions about whether the abuse was ever intended to be
meaningfully addressed.
In a democratic, rules-based Union, public officials bear a responsibility
not only to uphold financial integrity, but to ensure their policies foster
fair access and competition. The record of Mr. Donohoe—and that of his
predecessor Mr. Michael McGrath, now Commissioner for Democracy, Justice,
Rule of Law and Consumer Protection—in enabling and legitimising VAT abuse
as de facto illegal state aid, should exclude them from holding positions
that influence the governance of the Single Market.
I therefore respectfully urge you and your fellow Finance Ministers to
consider whether Mr. Donohoe remains a suitable President for the Eurogroup.
Yours faithfully,
Raymond O’Hanlon
Director, Preferred Results Ltd
<https://urlsand.esvalabs.com/?u=http%3A%2F%2Fwww.preferredresults.com%2F&e=e6a696fc&h=b134c6ce&f=y&p=y>
http://www.preferredresults.com/
A business improvement and turnaround company having delivered on over 200
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