Phil Hogan (Carlow-Kilkenny, Fine Gael) | Oireachtas source

I propose to take Questions Nos. 134 and 165 together.

Local authorities are under a statutory obligation to levy rates on any property used for commercial purposes in accordance with the details entered in the valuation lists prepared by the independent commissioner of valuation under the Valuation Act 2001.

The Commissioner for Valuation has sole responsibility for all valuation matters, including the most appropriate method of valuation. The levying and collection of rates are matters for each individual local authority.

It is important to acknowledge that commercial rates, as a local tax, and the rating system generally are deeply embedded in the local government system. A large body of case law is well established and local authorities and rate payers are, in the main, very familiar with and generally accepting of the operation and practice of the rating system. Rates are also a stable source of financing for local government which is not affected unduly by short-term changes in economic circumstances.

A property-based tax such as rates has a distinct advantage over any tax based on profits or incomes as it is generally found to be easy to collect and difficult to evade. A system having regard to economic factors on an ongoing basis would create uncertainty by providing for continuous change to the valuation base. Such a system would not provide a stable basis for funding local government and would require significant additional resources to operate.

I am conscious that local authorities have exercised restraint in setting their annual rates on valuation, ARV, in recent years and the average change of ARV across the 88 local authorities has shown a decrease - admittedly small - in each of the last three years. I have asked local authorities to continue to exercise restraint or, where possible, to reduce commercial rates and local charges for 2013.

See this speech in context