Abolish commercial rates, says hotels federation

The Irish Hotels Federation has called for the abolition of commercial rates and the introduction of a "more equitable" funding structure for local authorities.

"The commercial sector contributes 40 per cent of the €3.4 billion required by local authorities annually," said federation president Mr Richard Bourke. "It is estimated that an additional €500 million will be required this year and local authorities cannot keep calling on the commercial sector to foot the bill."

His comments come in a submission to the Department of Environment and Local Government on funding local government.

Mr Bourke said rates were a blunt instrument which took no account of the turnover per square foot - pointing to the difference between a small but lucrative professional firm and the larger square footage of a family hotel.

Hoteliers suggest the current rates structure should be replaced by a system of local taxation, which in the case of commercial groups should be based on profitability rather than property values.

For individuals, the federation recommends that a portion of current taxable income be allocated as a local income tax.

It also suggests user charges in proportion to usage of services like waste collection, planning fees and water supply.

The IHF also suggests that attention be paid to improving the efficiency of local authorities, in part by amalgamating smaller authorities or their back office operations.