Funding local councils ‘unfair’
Irish Hotels Federation (IHF) president Richard Bourke said changes to the rates system were essential to prevent the business sector from being unfairly singled out and penalised.
A new system was needed that would be based on business profitability rather than the value of the property where business was carried out, he said.
“Rates are a fixed charge, incurred annually, that are based on notional property values and bear no relationship to the size or scale of the business or its ability to pay,” said Mr Bourke.
“A small accountancy or legal firm could generate over €1 million in fees from a small office, whereas a 40-bedroom hotel, which is a much larger building, having a similar income, pays substantially more in rates.”
The federation also said the government should allocate a portion of income tax paid by individuals to help pay for local amenities such as parks, libraries and street cleaning.
The IHF said almost 40% of local authority income came from the business community. Given that city and county councils would need an extra €500 million this year, hotels and other service-related businesses could not be expected to foot the bill at a time when many were struggling to survive.
The buoyancy in income and corporation tax receipts meant local authorities could be financed from central government funds without raising the tax rates that applied to individuals and businesses, said the IHF.
The group also echoed last week’s report by the Chambers of Commerce of Ireland, which said there was scope to improve value for money in local government.
Merging smaller councils, setting up centralised units to handle back-office functions and the removal of so-called “financial distortions” concerning the tax treatment of local authorities would improve efficiency at local authority level.
“Our sector is struggling to be competitive amidst a high cost base,” he said.
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