John Paul Phelan (Carlow-Kilkenny, Fine Gael) | Oireachtas source

I argue, in a sense, that the provisions in this legislation will allow for those discussions. The inability to pay clause is, effectively, being inserted into the Bill, albeit by a different mechanism, to some extent where a ratepayer has entered into an agreed payment plan. The provisions under section 11 of the Bill are based on the provisions of the Taxes Consolidation Act 1997 which provide for the addition of interest to unpaid taxes to the Revenue Commissioners and in this respect aims to see rates treated on a similar basis. This measure is proposed as a further incentive to promote compliance with the payment of rates. There is no current legal provision for the imposition of a penalty for the late payment of rates.

The non-availability of a sanction, such as the charging of interest on late payments of rates, is regarded by rating authorities as a major weakness in rating law. It is considered that the charging of interest on the late payments of rates would be an effective method of accelerating collection within the current year and improving cash flow. The interest would accrue from 1 January of the following year and would only apply where a ratepayer refuses to enter into an agreed payment plan with the local authority. As such the introduction of interest on unpaid rates is focussed on incentivising engagement with the local authority rather than increasing the income of local authorities.

Local authorities have a long-standing record, as the Deputy has outlined, of working closely with businesses experiencing difficulty in the payment of commercial rates. I reiterate that one of the main provisions in this legislation is that the penalty will only apply where people do not enter into that agreed payment plan with local authorities. Generally speaking, local authority officials do use discretion with regard to genuine cases of people and businesses with an inability to pay. I have reservations about the creation of a statutory position whereby an inability to pay is put on the books in the manner proposed by this particular amendment. The current level of discretion should continue to be operated by the council officials. That is particularly the case in respect of agreements reached with businesses that may be in difficulty but that have agreed a plan to pay their commercial rates over a period of time.