The Irish Business and Employers Confederation is the largest lobbying group that is set out to represent the rights of irish businesses at a national and international level. This group is focused on supporting all different types of businesses, from large to small and across every aspect of the economy.
Recently, they published a press release that was aimed to protect local businesses incomes by calling for a tax reform on commercial rates that would centralize collection in a similar way to that of current, well utilized tax systems.
Ibec Senior Public Sector and Regulatory Executive Aidan Sweeney, said: “Local authorities have a significant impact on business conditions and cost competitiveness. This year businesses will pay €1.55 billion in commercial rates, up 14% since 2010. Approximately €1 out of every €3 spent by a local authority comes directly from local businesses. Local authorities are relying on business to balance their books.”
Local businesses were not consulted during the creation, voting or soon to be implementation of this new tax standard. This is most frustrating, given that they will be the ones needing to rebudget in order to balance their balance books so that they can continue to afford their current location and make a substantial gains that would allow business to continue as normal. These higher taxes may force business to transfer location; other consequences include the possibility of discouraging entrepreneurship and productive investment.
This bill gives local authority more power than they currently have when it comes to taxes. They will be given the power to regulate and enforce tax rates on specific businesses to promote development and create new flexible payment options.
Although the ability for local government to have the ability to regulate its constituents sounds like a positive change, it also invites corruption. Many local businessmen can use their political or economic power to gain tax breaks.
Additionally, each break must also be somehow counterbalanced in a different part of the local business district. The local authority must be able to calculate effectively a way to charge rates that first off, businesses can afford to pay, and second off will allow them to gain enough money to stay within their budgeted collection amount.
Overall, this bill on paper sounds like it can be a beneficial endeavor for the local community but in practice it may prove to be the opposite. There seem to be many additional factors that are currently being overlooked or downplayed in order to get these changes off the ground.