Donal O’Rourke

At a time when we should be rebuilding the domestic economy, the Government has increased VAT to 23%, the fifth highest rate in the European Union.


Small family businesses and retailers, which the Government promised to support by amending commercial rates, are on their knees. Nothing has been done and the opportunity has been wasted.


At a moment when  businesses need support the government is considering what amounts to a “sick leave tax” on employers on top of a crippling 2% VAT increase .


This is the sharp disconnect between the reality of the economy that people are faced with on a daily basis and the rhetoric of the government.


Issues like curbing and reforming commercial rates should be at the forefront of government efforts to generate economic activity.



Many of the businesses providing jobs, goods, services are battling for survival in the economic downturn. Stringent commercial rates are a central feature of the difficulties facing these small retailers.


The 1970 Local Government Rates Act currently includes the possibility of a waiver for some or all of the rates due by ratepayers.



This scheme is a reserved function of the Local Authority members and also requires the consent of the Minister, therefore the government.


The costs incurred must be met by the Council. This scheme has proven to be unworkable in practise.



Many businesses do not even know about it and in my meetings with employers they were generally surprised to hear about it.


The need for a council vote by members, the financial repercussions and then the need for government approval means that this scheme has had little, if any, impact on the burden of rate paying.



The Irish Employers for Affordable Rates, IEAR, an umbrella group representing Irish ratepayers on a whole, has put forward a series of worthwhile measures to address the problem.



Economic conditions and “Ability to pay” are key to their proposals.  Specifically, they have requested that Dáil Eireann insert an Economic conditions clause into the 2001 Valuation act. This would allow employers appeal a rates valuation due to a change in economic circumstances. They rightly argue that this amendment would alleviate the pressure



The UK model offers an alternative way forward for the rates system. Economic conditions and the ability to pay of the business is factored into account.



Councils have the power to exempt struggling businesses from paying rates and rural businesses have a 50% mandatory exemption on rates.

The money collected is put into a central pot that is then distributed to councils on the basis of need.


The comparative inflexibility of the current rates system here could be adapted to draw from the best elements of the UK model. This more inherently responsive system offers an opportunity to give businesses much needed breathing space.



The government needs to initiate legislation immediately to ensure that commercial rates are calculated and charged to businesses on a fair and equitable basis.

Minister Hogan has also yet to reveal any plans for a review of the Valuation Act that deals with commercial rates.



By putting this on the long finger, Minister Hogan is showing contempt for the thousands of small business owners in the country.

Presently rates are calculated on antiquated and out dated legislation which is not reflective of current economic conditions.



Cllr Donal O’Rourke