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Councils warned not to pass property tax burden onto local businesses

Chambers Ireland issue the call after a Sinn Fein motion in Cork to cut the local property tax.

Image: Mark Stedman/Photocall Ireland

CHAMBERS IRELAND HAS urged local authorities not to pass the financial burden of the local property tax (LPT) onto struggling local businesses.

The business lobby issued the call after Cork County Councillors voted through a Sinn Féin motion to cut local property tax by the maximum allowable amount of 15%.

Speaking to TheJournal.ie, Chambers Ireland chief executive Ian Talbot said:

“It’s understandable that councils will reduce the property tax…but it does leave a gap and their budget and the question is whether business will be asked to pick up the slack?”

He said that councils should resist the temptation to cut the rate of property tax until they have done their budget arithmetic.

“We’d rather see a budget done first and then decisions made about reducing or increasing rates.”

Sinn Féin response

Sinn Féin Councillor Donnchadh Ó Laoghaire, who seconded the motion to cut the local property tax, disagreed with the idea that the issue should have waited until there was more visibility on the county budget.

“I’m not saying that coming up with a budget won’t be challenging. It will be no matter what we do.”

He said that the priority of Sinn Fein on the council is to protect low and middle income earners.

In response to questioning over whether the LPT rate cut could cause a hole in the council’s budget, Ó Laoghaire said:

“To a point you could say that, but this was in our manifesto, and we received a particular mandate so we had to pursue it.”

At the same time, he promised that Sinn Féin would be working “to ensure that rates stay at least at the level they are at, and to reduce them if at all possible.”

High rates

Talbot argued:

Businesses already pay high levels of commercial rates and cannot take any more hits if we are to support growth and job creation. We urge any local authority that chooses to reduce the LPT to ensure they have adequate funding in place to accommodate this.

“The last thing we need is rates going up so that as circumstances improve, greater cashflow is eaten up by higher rates.”

While Cork is the first council to decide on the lower rate of local property tax, Talbot predicted that other councils could start to follow suit in the coming days.

He warned that while some councils have cut business rates, they generally have not fallen as quickly as other business costs during the recession as local authorities looked to bolster their coffers in straightened times.

“Business has always been the provider of last resort to councils”, he said.

Read: Rates freeze would see ‘return to bustling main streets’>

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