Local authority rates bad for business, chamber says

Businesses are paying 50 per cent more on average in commercial rates this year than they did at the start of the decade, according to the Chamber of Commerce of Ireland.

Mr Tom Clarke, chamber president, called on the Minister for the Environment, Mr Dempsey, to address rates, which are imposed at the discretion of local authorities, when the local government reform bill is introduced in the Dail later this year. The chamber wants rates to be capped at current levels "and that any increase would only be permitted where there is agreement between the local authority and the local business community". Businesses in Kells, Co Meath, have had the highest increases, according to the chamber's report, A Taxing Decade. Their bills have doubled since 1990 even though inflation has run at just 21 per cent. Trim comes second at 72.06 per cent, and Meath County Council is fifth.

But Mr Joe Crocket, Meath's assistant county manager who has worked on budgets for the county and for Kells and Trim, said that in the context of the chamber's study, it was "a nonsense" to examine percentage increases.

Rates are imposed based on a valuation of the commercial property and businesses are then charged at a percentage of that valuation, called the rate in the pound. "The key thing to look at is the rate in the pound," he said.

The rates bill for Kells businesses increased by 5 per cent last year, he said - the cap imposed by Mr Dempsey - amounting to a 50p a week increase.

"It relates to the level of service you want to provide. If you want roads properly looked after, footpaths, lighting, parks or amenities put in or maintained, then they have to be paid for," he said.

The chamber study has found businesses contribute to a quarter of all local authority expenditure and will pay £411 million (€522 million) in rates this year. This year, only two local authorities - Castleblaney UDC and Skibbereen UDC - imposed rates increases at less than the 2.4 per cent the rate of inflation.

Chamber chief executive, Mr Simon Nugent, said businesses were seeing less value for money for rates paid because local authorities were increasingly imposing additional charges for specific services. Businesses now pay fees for commercial waste and waste water disposal, commercial water charges, levies on planning permission for parking, and connection to water and sewerage services.

The chamber also argued that local authorities should have the power to raise taxes locally.