For many years Ireland’s archaic system of commercial rates has penalised smaller enterprises at the expense of larger, more profitable, businesses.
Mind you this is not just an Irish phenomenon, In Britain the chancellor of the exchequer, Philip Hammond, stated at the beginning of March that there needs to be a “fundamental reform” of rates. Given that this State inherited the system from the British, it’s no surprise then that Simon Coveney, the Minister for Housing, Planning and Local Government, was prompted to look into this particularly vexing issue.
Minister Coveney has been working on a Bill that proposes to give local authorities a certain amount of discretion when setting the rate at their annual budget. When he was CEO of Clare County Council, Tom Coughlan often made the argument that local authorities should be allowed to structure the rates depending on the size and function of a business.
According to reports in the national media, this is along the lines of what Minister Coveney has in mind with his proposed new legislation to streamline the rates system. His plan proposes to introduce a rates “alleviation scheme” to give councillors powers to reduce rates for businesses.
Minister Coveney stated, “I want a system that creates a level playing field to support commercial rates payers throughout the country, whether they are small start-ups, SMEs or large multinationals.” In addition it is proposed that businesses will be able to spread their rates payments over the year. Local authorities will also be given stronger powers to collect outstanding rates.
Mr Coveney commented, “A modernised rates framework is good news for all users of local authority services and offers a real opportunity for local authorities to improve the quality of those services. Local authorities are key enablers of local economic development and I intend to give councillors further new powers to look at options such as rates alleviation to support specific economic activities or particular areas, taking account of their own local circumstances.”