Dublin 'Bed-Night' Tax Could Raise €20m

The Irish capital is not only to seek a share of income tax, stamp duty and VAT generated in the city, but also to lobby for the power to levy rates on government buildings, schools, universities and hospitals in its area - and to raise funds from hotel 'bed nights' from tourism too.

Dublin City Council is suggesting the radical funding proposals in its submission to the Government's recently established Commission on Taxation, which will determine the future of local government funding.

In its submission prepared by the council's finance department in conjunction with consultants Grant Thornton and presented to councillors for the first time yesterday, the council is seeking not only a share of taxes generated in the city but the power to levy such taxes and decide the level of those taxes.

Dubliners and visitors to the city may see no effect on their pockets if the council gets a share of taxes that currently go straight into Government coffers.

However, if the council is given the power to raise its own taxes and charges, and determine their level, residents could face new environmental charges, increased planning costs and higher motor tax, while tourists could have to pay a hotel bed charge.

The submission also states that a hotel tax of just €1 or €2 a night would raise revenue in the region of €10 million to €20 million per year.

The proposals, even if granted only in part, would represent the greatest change to local government funding since domestic rates were abolished in 1978.

Although the council's proposals are radical, it has reason to be optimistic given that Minister for Environment John Gormley has said he wants to increase the powers of local government.

In addition to securing new revenue-raising powers, the council is seeking to divest itself of the burden of funding some services.

One of the biggest revenue-generating streams in the council's submission would be the abolition of the exemption for public properties from commercial rates. The submission states that by not making the contribution commercial premises do, government departments and their staff are benefiting from the city's services without paying for them.

(BMcC)