Businesses say the rapid rise in commercial rates in recent years is placing too much pressure on employers, writes Dominic Coyle.

Local authority income from commercial rates has risen by four times the rate of inflation since 2000, a new report by business lobby group IBEC states. It also notes that there is a huge disparity between rates being levied across the State.

According to the employers' group, Limerick City Council's valuation multiplier for rates of €73.06 is 71 per cent higher than the €43.04 set by Kilkenny County Council.

There has also been wide divergence in recent increases, with Fingal County Council in Dublin raising its rates by 20 per cent between 2000 and 2004 while Galway County Council has imposed a 42 per cent rise.

IBEC director of enterprise Mr Brendan Butler says that local authority income from rates this year will amount to €950 million, compared to €590 million in 2000.

On top of an increase in the rates levied, economic growth has seen a rise in the number of businesses subject to rates and improvements to premises have seen their rateable valuation revised upwards.

Services such as waste disposal, water supply and treatment, and infrastructural development are no longer included in rates. These are now charged separately, raising the burden on business, according to Mr Butler.

"The cumulative impact of these local charges was to increase the cost of doing business in Ireland and to stifle growth and innovation," he said, adding that local councils appear to see business as a "soft touch".

Commercial rates must reflect the cost of providing services and should not be used as stealth taxes, IBEC warns, suggesting the the current review of local authority funding provides an opportunity to link funding with service delivery.