FARMERS, churches, state buildings and B&Bs should pay the same local authority rates and water charges as businesses, according to the Irish Small and Medium Enterprises Association.
ISME chief executive Mark Fielding has accused local authorities of being “lazy and inefficient” in repeatedly raising the commercial rates, which have jumped by 47% over the past 10 years, twice the rate of inflation.
This action is jeopardising jobs in indigenous businesses, argues ISME, who are demanding that local authorities spread their net further to share the burden of funding local authority services in a more “equitable” manner.
Mark Fielding said: “Business is the only sector of society that is compelled to pay commercial rates, essentially a local business tax, which penalises enterprise and suppresses local job creation. Commercial rates are a significant burden on small enterprises, with business contributing 27% of the total revenue stream to the local authorities. In the last 10 years these rates have increased by a massive 47%, over twice the rate of inflation, as a result of Government’s failure to properly fund local government.
“Apart from being the only sector now liable to pay rates, business also pays for water, waste disposal, planning charges and the provision of parking. This form of local stealth tax has a disproportionate impact on SMEs and is not related to ability to pay, liquidity or profitability.”
ISME members started an organisation in Wexford entitled Employers Against Rates (EAR), which has mandated Friends First economist Jim Power to come up with an alternative to rates as a source of local authority funding. One EAR study suggested that a local sales tax of 0.5% could replace the money gained by local authorities via rates, and which Mark Fielding also believes would spread the burden of funding local services more equitably.
Mr Fielding is demanding a reform of local authority funding to make it more equitable and reduce the overwhelming burden of rates on the business sector.
ISME is demanding a root and branch review of the performance of local authorities, benchmarked against the best in class internationally.
It is also seeking the implementation of the recommendations of the Local Government Review Report of 2010, outlining €510m in savings.
ISME also want the re-introduction of agricultural business rates and the introduction of metered water charges, commercial rates to be extended to state buildings, church property and unregistered B&Bs, and a 20% reduction on all local charges on businesses for 2011/2012.
It also wants the appeals mechanism to be reformed, the introduction of key performance indicators to measure local authority performance against specific benchmarks, and a moratorium from paying rates for the first three years of a business start-up.
Mr Fielding concluded: “For too long, legitimate private business has been the easy target of lazy and inefficient local government, while agriculture, state properties and unregistered B & Bs are ‘exempted’. Equity is one of the cornerstones of taxation and in the case of commercial rates there is none.”
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