Tuesday, 6^th March 2007

IHF PRESIDENT SLAMS ANTIQUATED LOCAL AUTHORITY TAXES
HOTELIERS SUBSIDISING LOCAL AUTHORITY SERVICES

The Irish Hotels Federation (IHF) President, Annette Devine today slammed taxation imposed on hotels by local authorities as being antiquated, anti-business and anti-competitive. Speaking at the IHF’s 69^th Annual Conference in Cavan, Ms Devine stated that effectively IHF members’ businesses are being penalised by an antiquated taxation system of commercial rates that sees local authorities extract taxes relative to the size of premises without any recourse to the level of turnover or overheads of the business.

“This is completely out of touch with the reality of business today. Thanks to technology and greater efficiencies, many businesses and professions generating substantial turnovers operate out of significantly smaller premises. Commercial rates continue to be imposed with no reference to income yields or other associated overheads. The reality is that the hotel sector is disproportionately subsidising local authorities and their services,” stated Ms Devine.

The IHF maintains that tourism is clearly a very valuable indigenous industry. It generates over €5.9 billion annually for the economy of which €2.7 billion goes to the Exchequer, representing 3.1% of GNP. This provides an underlying benefit to local authorities in terms of local business and income generated.

“We remain disappointed that the current Government has continued to ignore this anomaly whereby local authorities could be generating more income through a more equitable local Taxation method rather than focussing the burden largely based on property size instead of on profits of a business. For example, an increase in corporation tax to 12.25% and applying the increase plus a ring fencing of a portion of personal income tax to the financing of local authorities would be much more equitable than the current rates system.  he next Government must address the unfair targeting of the property owning business sector and consider the introduction of a more equitable regime that takes into account income rather than scale of premises”, said Ms Devine

“In the interest of competitiveness and our sector’s growth potential, we wish to urge a review of the commercial rates system to reflect more appropriately the reality of business in modern Ireland,” stated Ms Devine.

FOR INFORMATION:

Siobhan Molloy/Eoin Quinn              Tel: 01 676 0168

Weber Shandwick                              Mobile: 086 8175 066 / 087 2332 191