In 1826, 200 years ago, King George IV decided to sign into the law the government valuation of Ireland Act. That set in train the process of commercial rates. This was the way in which local government was funded. A decision was taken to levy rates on all properties. Those rates were determined based on the floor space of properties. In 1979, commercial rates were removed from domestic properties and, following a court challenge in 1984, they were also removed from agricultural properties. We are still in a situation whereby one of the main ways in which local government in Ireland is funded, to the tune of some €1.5 billion per year, is through commercial rates. This is a system that has existed for 200 years, in spite of all the changes that have happened in business since. The Minister of State knows how enterprise has transformed in that time, particularly with new technology. For example, in my home town of Gorey, there is an Eason and a Bookstation shop, which are both good book shops. They pay commercial rates to Wexford County Council but they compete against the likes of Amazon, the world’s biggest book seller, which does not pay any commercial rates because it does not have a main street presence. Those same main street retailers - it applies to every other sector as well - are also expected to contribute to our communities and sponsor local events, which they all do. Similarly, cafés and restaurants in the hospitality sector rely on large amounts of floor space. The bigger the restaurant, however, the higher the commercial rates. It is not based on turnover. Many forms of taxation work on the basis of income levels or turnover. I know the Minister has looked for a review around the functioning of local government more generally but this issue relates specifically to how we fund local government. I totally accept this is a political hot potato but in the modern world in which we live, we continue to decide a sizeable junk of local government funding on the basis of the floor size of a particular premise. We should also bear in mind that constituencies offices of TDs are exempt from commercial rates. From talking to businesses, I know they view this as exceptionally unfair. During Covid, we rightly took the decision to help businesses by suspending the payment of commercial rates. In order to support our main street businesses that we all enjoy and to make it a level playing field with the online world, can we move to a situation where we either access local taxation based on turnover or find a more appropriate way of funding local government? It is bizarre that a system that is nearly 200 years old stills underpins the funding system we use. I have raised this issue on a number of occasions. In order to give businesses a break, I urge the Minister of State to move away from the current commercial rates system.
Sentiment score: 0.08
Yes. It was King George IV.
Sentiment score: 0.20
The response provided by the Department sets out the process by which it is carried out. I have no question about the professionalism of the public servants who carry it out but it is the principle. The Minister of State made the point about similarly sized businesses with regard to floor space. A bookshop in Gorey, Arklow, Wexford or Sligo is likely to be assessed in broadly the same way but the problem is their competition is the likes of Amazon and online sellers which are not subject to commercial rates. If we want to protect our main street business, which we all do, we have to have a level playing field. When it comes to infrastructure, for example, telecoms towers, rates are often based on turnover of the companies. I ask the Minister of State to take it back to the Minister. I feel passionately about this. The Minister of State knows how important main street shops and businesses are. This is an unfair cost on them. It is not that they are opposed to contributing but why are they put at a disadvantage when it comes to an online space? I could operate a multi-million euro businesses just from my phone and I would not need any floor space but if someone operates in our communities, providing vital services in many cases, it is ridiculous that the tax they have to pay is based on floor space. That was fine 200 years ago; it is certainly not in the case of a modern economy.
Sentiment score: 0.05