Finian McGrath (Dublin North Central, Independent)
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Question 124: To ask the Minister for Finance if he will support a matter (details supplied) [43683/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Revenue Commissioners are charged with responsibility for collection and recovery of a wide range of taxes and duties including VAT. Revenue expects businesses, notwithstanding the difficult economic and financial circumstances in which they are operating, to organise their financial affairs so as to ensure that tax debts are paid as they fall due. Apart from the critical importance of timely compliance to the Exchequer, unfair competitive advantage achieved through persistent late or non-payment of tax undermines compliant businesses. I fully support what Revenue are doing in that regard.

Revenue has encouraged early engagement with them by businesses experiencing particular challenges in being compliant with a view to facilitating the putting in place of an agreed approach to the management of those challenges. Revenue's objective is to confirm the basic viability of such businesses and to secure timely compliance and payment of any tax debt in the shortest possible timeframe.

Arising from amendments in the Finance Acts, Revenue introduced a scheme in 2006 and 2007 for smaller PAYE/PRSI and VAT registered customers that reduced the frequency of tax returns and payments required of such businesses. Smaller businesses benefit from the less frequent filing and payment facility under the scheme through improved cash flow and reduced costs of administration. I am satisfied that the overall approach to small businesses in relation to their obligations to pay VAT as reflected in the measures outlined, are of importance and considerable help in the current difficult trading environment.

With regard to small businesses paying rates, I have been informed by my Colleague, the Minister for the Environment, Heritage and Local Government, Mr. John Gormley T.D., that 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 levying and collection of rates are matters for each individual local authority. However, the Minister has urged local authorities to exercise restraint in setting the Annual Rate on Valuation (ARV) in this and previous years and they have responded positively in this regard. Across the 88 local authorities, the average change of ARV from 2009 to 2010 shows a decrease of 0.62%. As part of a range of measures to aid economic recovery, the Minister is clear on the need for continued reductions in commercial rates over the coming years.