ISME, the Irish Small & Medium Enterprises Association, has demanded that the Government reduce the financial burden that commercial rates places on small and medium business across the country, through a total reform of local authority funding. 
The survey released today shows that commercial rates are posing a threat to over 40% of SME businesses, with almost three out of ten unable to pay their current rates.
The survey was carried out in the week ending 8th July and the results show the increasing difficulty that rates are imposing on business.
· 40% acknowledge that rates are posing a threat to their very survival, with micro businesses suffering most. The retail trade is by far the most vulnerable, with 65% threatened.
· 28% of enterprises state that they will be unable to pay their rates in 2011.
· One in five has outstanding rates from previous years. The construction sector has the largest number of businesses in arrears, at 39%.
· One third will have outstanding rates at end of the current year, with over half of the retail sector predicting arrears.
· 73% of respondents state that the system of rates is unfair.
· Greater efficiency in the local government was suggested by 46% and a reduction in the number of local authorities by 27% of respondents, as solutions to equitable funding.
According to ISME Chief Executive, Mark Fielding, “rates are often the third highest cost item after wages and rent payments for business. They also have a disproportionate effect on small and medium enterprises as, unlike other taxes, they must be paid whether the business is profitable or not. In the last 10 years these rates have increased by a massive 47%, over twice the rate of inflation, as a result of local management ineptitude and Government’s failure to properly fund local government.”
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