Seán Fleming (Laois-Offaly, Fianna Fail)
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4. To ask the Minister for Public Expenditure and Reform if consideration will be given to introducing a system of self-assessment for commercial rates, in view of the systemic inability of the Valuation Office to carry out valuations in a timely manner; and if he will make a statement on the matter. [5960/15]

Seán Fleming (Laois-Offaly, Fianna Fail)
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Has the Minister given consideration to introducing a system of self-assessment for commercial rates in view of the systemic inability of the Valuation Office to carry out valuations in a timely manner and in view of the fact that income tax and corporation tax are all carried out on a self-assessment basis, subject to audit by the Revenue Commissioners, and work successfully?

Brendan Howlin (Wexford, Labour)
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The national revaluation programme, which amazingly is the first general valuation of all commercial property in the State since the middle of the 19th century, is making progress. It is a very significant undertaking and involves the valuation of some 146,000 properties. Completing the first revaluation and getting every local authority onto what would be a more normal five to ten year cycle of revaluations represents a sea change for the valuation system.

As the Deputy will know, the current position is that all local authorities in Dublin, Waterford and Limerick have been revalued.

These 48,000 properties represent 33% of the total. In addition, 13 public utilities representing the largest ratepayers in the State have also been revalued on a global basis.

Significant progress is being made and the programme has established a momentum that will shortly be built upon when the commissioner makes valuation orders for the revaluation of more local authorities. In parallel, the Valuation Office has continued to carry out revision work and, since 2011, a total of 22,467 revision valuations have also been completed. However, as the Deputy is aware, I am introducing measures in the Valuation (Amendment) (No. 2) Bill 2012 to accelerate the revaluation programme. These include provisions for occupier-assisted valuation as well as outsourcing and streamlining the appeals process and wider use of computer-aided techniques.

"Occupier-assisted valuation" is the term being used for the form of self-assessment about which I think the Deputy is talking. It will be introduced as it better reflects what will happen in practice. Valuation of commercial property is often a very complex process, resulting in annual rates bills that can be very significant for an individual ratepayer. This requires the application of a uniform approach and is much more complex than the self-assessment for local property tax, which has been very successful. Occupier-assisted valuation will be a valuable new addition which will help to accelerate the revaluation programme and bring ratepayers into closer contact with a system that is one of the key determinants of their rates liability.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I understand what the Minister has said - he is essentially outlining the position. I am probably coming at this from a different perspective, as I think the system is not satisfactory. He is saying that up to 40% of properties have been revalued over the last seven years. If it is going to take ten or 12 years, that just is not good enough for small, medium-sized and large businesses. He might say this is the first time it has been done. There was always a valuation system.

Brendan Howlin (Wexford, Labour)
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It has taken 150 years to get here.

Seán Fleming (Laois-Offaly, Fianna Fail)
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There has been a valuation system and people have been paying rates for the last century. A new regime came in and in 2007 we starting revaluing. When I referred to self-assessment, it was not just about the local property tax. Income tax and corporation tax are self-assessed and are working very well. In view of the massive changes in the economic cycles, there are many businesses whose properties were revalued in 2007 and 2008, at the height of their value, and they are not on the schedule to have their properties revalued for another four or five years, by which time many of those businesses will be gone. There are proposals to amalgamate this agency, and that is going to lead to further delays in the process.

Brendan Howlin (Wexford, Labour)
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As the Deputy will be aware, the Bill will formally come before the House tomorrow, and the Minister of State, Deputy Harris, will take it. He took the Bill in the Seanad and there was a very constructive debate there on some of the issues Deputy Fleming is talking about. The Minister of State is approaching the Bill, as am I, with a very open mind to make it as effective as we possibly can.

There are complexities in this, because assessment of income is quite different from assessment of value. Value has a geographical meaning as well. The same property in two different locations has a different value, whereas income is standard wherever the valuation is being made, so assessing for income tax is simpler. All the points the Deputy has raised can be addressed in the context of an open debate on Committee Stage when the new valuation Bill progresses through the House.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I understand what the Minister is saying, and we will certainly take advantage of that. However, what is required is bigger than what this amending legislation for the Valuation Office is proposing. It is a bigger issue than that.

There are also proposals, as the Minister is aware, to amalgamate the Valuation Office with Ordnance Survey Ireland and the Property Registration Authority. The new body would not be under the Minister's Department any more. When a new amalgamated agency is set up, the first year is spent setting up the new board, corporate governance, and the new chief executive. In the second year all the senior management who got jobs will be interviewing people for the ranks below them. It is a simple fact of life that every time a new organisation is set up, in the first two years a lot of the energy goes on setting up the structure of the staff and governance. That in itself is going to lead to delays in what the Minister hopes will be a relatively speedy operation. I do not think it is a speedy operation in the first place. Setting up the new agency might be an opportunity to take an entirely fresh look at the self-assessment situation. I will go into it in further detail during the passage of the legislation through the House.

Brendan Howlin (Wexford, Labour)
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We have an open mind in terms of hearing practical solutions to these issues. From the very start in 2011, we set out a fairly dramatic programme of agency rationalisation which was broadly supported across the House. We have implemented all of that and there are one or two final bits to be done. This is one of them, and we need to have the courage of our convictions and bring it to fruition. There have always been teething problems with one or two agencies coming together. We have not completed all of the work yet, but I am determined that the programme we set out in 2011 and the reviews we have done since will be brought to a conclusion this year.