Reform commercial rates with new collection model

June 26, 2019

Ibec, the group that represents Irish business, today called for reform of the collection of commercial rates through the introduction of a new centralised or shared service collection model similar to the Local Property Tax system. The new proposal follows the movement of Local Government (Rates) Bill 2018 to the Third (Committee) Stage in Dáil Eireann. 

Commenting on the report, Ibec Senior Public Sector and Regulatory Executive Aidan Sweeney, said: “Local authorities have a significant impact on business conditions and costs competitiveness. This year businesses will pay €1.55 billion in commercial rates, up 14% since 2010. Approximately €1 out of every €3 spent by a local authority comes directly from local businesses. Local authorities are relying on business to balance their books. 

“The collection of commercial rates must be improved but it must also be done more efficiently. A centralised or shared service collection model like the Local Property Tax system should be considered. Securing a wider revenue pool should be used to reduce the burden on local businesses. 

“New commercial rates incentive schemes are needed to encourage regeneration, entrepreneurship and productive investment. They must be properly budgeted for and not crudely fall on remaining rate payers in the locality. Local businesses should be consulted over the development of new incentive schemes. After all, local authorities are responsible for local economic development. 

“The new legislation as it stands does not go far enough. The revaluation process must be scrutinised including costs and timelines which are far too slow. Finally, we are calling for a full review of local government finance, including examination of replacing commercial and domestic property taxes with a site or land value tax.
“Reductions in central government contributions have resulted in local authorities becoming ever more reliant on local business for their revenue. This is not sustainable. It is time for a comprehensive discussion on local government funding,” he concluded.


Ibec Policy Brief Reforming Commercial Rate Local Government Rates Bill 2018 pdf | 274.4 kb