A radical re-think of rates was unveiled to a mixed reception by Stormont’s Finance Minister yesterday.
Mairtin O Muilleoir said his package of measures aimed to modernise the commercial and domestic rating system and stimulate the Northern Ireland economy.
He said: “The package constitutes the biggest shake-up in rating policy in a generation, and signals my commitment to a tax system that is fair and that supports prosperity.
“My aim in setting out these proposals is to ultimately arrive at a refreshed, fit-for-purpose rating system in which citizens and commercial ratepayers contribute, according to their ability, to funding the building of a modern, inclusive, exemplary society.
“I also intend to ensure that rates act more as an economic spur. The rates system should encourage regeneration, investment and entrepreneurship, and at the same time discourage dereliction and decline.”
Replacing the Small Business Rate Relief Scheme with a new £22 million investment in small retail and hospitality businesses is among the big ticket items on the minister’s list of changes.
The proposed scheme, likely to run for three years, would give up to 40% support to 13,000 businesses, including shops in provincial towns which previously missed out.
However, some 10,000 miscellaneous properties, such as offices located above shops, would not be eligible for relief.
The Minister said an academic evaluation of the Small Business Rate Relief Scheme, which was introduced in 2010 to provide temporary respite from the recession, found it had served its limited purpose and contributed little to economic growth.
Two pilots to regenerate deprived areas of east and west Belfast have also been put forward.
The so-called Business Empowerment Zones will begin in the lower Newtownards and lower Falls Roads and will provide special rates relief to encourage business and investment.
Mr O Muilleoir said: “Having worked extensively in both areas I know that the will is there to transform these key arterial roads - and that a small amount of investment can now reap dividends for years to come.”
If successful, similar schemes may be trialled in a rural area, the minister said.
Among the more controversial measures is the reduction in support for charity shops which may be charged up 10% or 20% rates.
“We cannot have our high streets just made up of charity shops,” added Mr O Muilleoir.
DUP MLA Emma Little Pengelly, who chairs the finance scrutiny committee said: “I welcome the statement although some will create concern within the constituency particularly around the domestic cap.”
She also asked the minister to commit to coming before the committee to outline his thinking in more detail and ensure that the proposals were brought before the Executive.
The Alliance Party’s Stephen Farry said he gave “credit” to the minister for setting out a “very ambitious agenda” but cautioned against sending out mixed messages.
“Given the current ongoing deadlock around the transfer of regeneration powers to councils is there not a danger that we are actually sending from the Executive a very mixed and indeed contradictory, incoherent approach to how we would best regenerate our towns and cities across Northern Ireland,” he said.