Cowen instigates review on commercial rates overhaul

Fianna Fáil Spokesperson on Housing and Local Government, Barry Cowen TD, has secured a commitment from Minister Simon Coveney, that a comprehensive public consultation and review of the Commercial Rates System will be instigated in the autumn.

Speaking after this morning’s Committee, Deputy Cowen commented, “Commercial rates are a major burden on struggling businesses throughout the country and there are many aspects of the system that requires review and reform.

“For example, the system of State valuations is unwieldy and does not take account of commercial reality. On-the-ground valuations of commercial properties often bear no relation to reality. Many struggling businesses have been stuck with a valuation undertaken during the boom years, when property prices were at their highest, and have been struggling to pay these inflated commercial rates ever since. More regular and fairer valuations must be undertaken in each area.

“Local authorities derive 28% of their finance from commercial rates. Retailers in towns nationwide are burdened with financing local government to an unsustainable level. Small businesses need greater predictability in how rates are calculated and more importantly, that they are proportionate and fair.

“Encouraging and fostering entrepreneurialism is vital to building a vibrant economy across both rural and urban Ireland. However, for entrepreneurs hoping to set up new businesses or existing retailers fighting to keep their heads above water, the commercial rates system can be the straw that breaks the camel’s back and render their efforts financially impossible.

“Out of town, large shopping developments with reduced commercial rates and cheaper parking allow business to grow and expand leaving town centres suffering. We need to breathe new life into our towns and villages and encourage start-ups to take the risk and start generating job creation.

“This review will also consider the future of the Commercial Rates System as it is currently structured. At present, the entire weight of the commercial rate burden falls on traditional bricks and mortar premises across Ireland. In contrast, more nimble e-businesses are not subjected to a commercial rates tax as they do not have premises. It is time to re-evaluate the long term viability of what is in effect a property tax on businesses and in an age when business is becoming increasingly mobile,” concluded Deputy Cowen.