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A Note on Accelerated Depreciation and Investment Allowances

Author

Listed:
  • Douglas, Robert A.
  • Peterson, Deborah C.
  • Kokic, Philip
  • Parameswaran, Bhamathy

Abstract

Accelerated depreciation and investment allowances are frequently requested by industry as a means of encouraging investment and promoting the adoption of socially desirable practices by farmers. Examples include the 100 per cent tax deduction for capital expenditure to combat and prevent land degradation (Section 750), and the recently introduced 10 per cent investment allowance for fodder and water storage for livestock, water conveyancing and minimum tillage equipment. Farm level survey data are used to provide evidence of the extent and distribution of benefits to farmers that flow from different rates of depreciation, and from the introduction of a 10 per cent investment allowance. A priori, it may be difficult for the farmer (or farm financial adviser) to determine which depreciation period will provide the largest tax benefit, as the results are dependent on both future taxable incomes, and tax rates.

Suggested Citation

  • Douglas, Robert A. & Peterson, Deborah C. & Kokic, Philip & Parameswaran, Bhamathy, 1995. "A Note on Accelerated Depreciation and Investment Allowances," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 63(01), pages 1-16, April.
    • Handle: RePEc:ags:remaae:12539
    DOI: 10.22004/ag.econ.12539
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    Citations

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    Cited by:

    1. Batterham, Robert L. & Fraser, K.I., 1995. "Capital Equipment Replacement Decisions," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 63(01), pages 1-8, April.
    2. Davenport, Scott V., 1995. "The Role of Income Taxation in Natural Resources Management," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 63(01), pages 1-9, April.
    3. Robert Douglas, 2003. "Potential Effects of Selected Taxation Provisions on the Environment," Urban/Regional 0304001, University Library of Munich, Germany.
    4. Freebairn, John W., 1995. "Issues in Tax Design with Special Reference to Agriculture," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 63(01), pages 1-9, April.

    More about this item

    Keywords

    Agricultural Finance;

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