Retailers say €200m lost annually in uncollected local authority rates

More than €200 million is lost each year in uncollected local authority rates, according to retailers who have called for an overhaul of the system.

Retail Ireland, the Ibec group that represents the retail sector, launched a new policy paper Tackling the Rates Burden on Monday.

The paper said “serious deficiencies” in the system governing how local authority rates are levied and collected from retailers result in more than €200 million in uncollected rates each year.

The retail sector called for a break in the link between rents and rates, as this has led to many retailers paying “disproportionate costs” due to the prevalence of upward-only rent reviews.

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Instead, retailers want the Government to prioritise reform of the current system through the introduction of a new rates valuation Bill before the end of 2017.

Retail Ireland director Thomas Burke said local authority rates make up a “significant portion” of total input costs for Irish retailers.

“The current system is opaque, inconsistent, inefficient and expensive to operate,” he said. “Irish retailers are willing to pay their share in order to help improve local services, however the current system is wasteful and places an undue cost burden on retailers.

“Retailers have seen a significant increase in rates in recent years with very little return in terms of new service provision. This is of particular concern as retailers feel the pressure of rising costs across a range of other inputs such as labour, rent and utilities.

“This is leading to a general erosion of the sector’s competitiveness.”

Retail Ireland called for the introduction of a centralised collection process, and for the responsibility for collecting the rates to be allocated to the Revenue Commissioners.

In addition, it said the methodologies used to calculate commercial rates need to be reformed.

On the revaluation system, it said the current system was “opaque and discourages further investment in the regions”.

Furthermore, it said there ought to be am increase in the local property tax intake.

“Increased revenue from the local property tax should be used to ensure our town centres and city centres are revitalised and regenerated as thriving, exciting places to live, visit and spend time,” it said.