Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

Commercial rates are an old legacy from the 19th century and they are still here. This says quite a bit. I do not believe for a minute the Revenue Commissioners, who deal with general taxation and the collection of taxes, could operate a system based on the 19th century. We must look at the entire valuation system, commercial rates and the Valuation Office in this regard.

The Government pays lip service to this topic when it is asked about it but then ignores it on every other occasion. Nothing proves this more than the fact the Bill was published on 1 August 2012 and more than two and a half years later it is making its first appearance in the Dáil. This is the Government's commitment to dealing with commercial rates. I know it went to the Seanad last year, but it is still two and a half years later. If I were running the Valuation Office and I knew legislation would not see the light of day in the Dáil Chamber for at least two and a half years I would be in no rush to get on with revaluations throughout the country because the Government is in no rush to deal with it. The Government's attitude has set the tone for the lack of activity in the Valuation Office, and in doing so has undermined the entire existence of the valuation system we have at present.

Imagine the mess we would have if the Revenue Commissioners did not have an online system and people could not pay their taxes online. One cannot pay commercial rates online. I checked my local authority's website this morning, and one can pay online for practically everything a local authority does except commercial rates. I am not asking the Minister of State to change this, because the system is so broken that a little tinkering with the system is not the issue, but it is symptomatic. One can pay online every sort of a fine, waste management bills and almost anything else one likes to a local authority because they have become very efficient, but the system does not allow online payment for commercial rates. It is indicative of the fact this system has been left in the backwoods since the 19th century.

In 2001 legislation was published to commence the revaluation process. The briefing document I received yesterday contains the exact figures, and the Minister of State has just said 33% of the 146,000 properties have been revalued since the introduction of the 2001 legislation. He stated the in excess of 33% of all rateable properties which have been revalued constitutes approximately 57% of the valuation base. After 14 years only one third of the properties has been revalued, and the Minister of State has said today the other two thirds will be done in the next three years. This is not credible based on past experience. One might say the process was commenced in 2005 as opposed to 2001, but this would mean that after nine years only one third has been completed. Not at all will two thirds be done in the next few years.

I oppose everything to do with the Bill on Second Stage and I will table a series of amendments on Committee Stage, because this is not the legislation required to deal with commercial rates. The legislation contains a few little patches and band aids for technical faults which have been found in the system and issues causing problems, but even if this legislation was introduced and worked perfectly it would be working in a system which should not exist. There needs to be a new system from scratch for commercial rates, which are a business tax and must be done in a business-like manner.

I find it incredible that since 2005 only one third of the buildings has been revalued. It is testament for winding up the Valuation Office. The Government has agreed to this and I will come to Tailte Éireann which will be created through the amalgamation of Valuation Office, Ordnance Survey Ireland and the Property Registration Authority. I do not know the reasoning behind it. Perhaps it makes sense. Within it is an opportunity to have a proper commercial rates valuation system.

The commercial rates system should be in line with all other taxation systems in Ireland. Income tax is self-assessed, as is corporation tax. People fill out their accounts and send in the amount owed, subject to audit and stringent penalties and arrears if they are found not to make proper returns. The Revenue Commissioners have great methods within their systems to see whether what is received from an industry is valid, and they will spot the exceptions and know where to go. Capital taxes are self-assessed; one fills in a capital gains tax form or a capital acquisitions tax form, and the executor of an estate does the valuation for inheritance tax. The new local property tax is self-assessed, and if we have self-assessment for 1.5 million houses we should be able to have self-assessment for 146,000 commercial properties.

We should bear in mind that people who are in commercial properties and businesses would have a better way of knowing how to do a self-assessment than many householders, who would never have been asked to do something like that in regard to local property tax. I asked the Minister of State a question about self-assessment in the House yesterday morning. He has provided for an enabling provision to allow one county to be selected for a pilot scheme. A period of two or three years would be allowed for the pilot scheme, then a year to assess it and then we might move on to two counties at that stage. That enabling provision to allow one county to do a pilot scheme is all that is provided for, and that was probably indicated yesterday at the committee. In response to a question I asked the Minister of Sate about self-assessment yesterday, he replied that this requires the application of a uniform approach and that it was much more complex than the self-assessment of local property tax, which has been successful but which cannot be replicated in this situation. The people who wrote the Minister of State's script yesterday said the issue was too complex and that he could not go there, but I am surprised that he bought that line. He probably did not have time to read it. Of course everything is complex; that is why we are here. If it was simple, we would not even have to talk about it. The Minister of State's reply was that we could value all houses through self-assessment, but it is too complex to do that for a business. However, the reverse is the case; a business should be more capable of self-assessment. The fact that it is complex is no excuse for not doing it. However, I do not even believe it is complex. That was a fob-off in the reply I got yesterday.

The Minister of State spoke about the provision allowing owner-assisted valuation, and it was confirmed yesterday that this would apply only to one local authority area, as indicated in the briefing notes. I challenge everything about this legislation. There is no reason this item of business taxation should be so separate from every other taxation method, but it is probably because it is a 19th-century system drawn up by Valuation Office. Rates are struck by the local authority, and the system has escaped proper examination. I am not saying that the levying or collecting of it should go to the Revenue Commissioners, although that is something we may come to consider, as it might be more efficient, although it might not be. The main reason I have a reservation about it is what the Government did with the Local Government Fund - it took money collected through local property taxes and motor taxation for local government and is now giving 30% of it to Irish Water. If I could be sure the money collected by the Revenue Commissioners under a rateable system would go back in an efficient manner to the local authorities, that would be worth considering, but currently the Government could not be trusted to do that because it would probably end up giving some of it to Irish Water, saying that businesses use water, and while it would acknowledge that businesses pay rates, it would charge them this as well.

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