Retail levy would deter investment, warns CBI
Putting a tax on large shopping spaces would make retail investment in Northern Ireland less attractive than anywhere else in the UK, according to a major business group.
The CBI said that Finance Minister Sammy Wilson's proposals will undermine city and town centre regeneration efforts at a time when consumer confidence and demand is plummeting, inflation is rising and sales are dropping.
Mr Wilson's plans aim to use money generated by the 'large business levy' to help prop up smaller firms.
However, the CBI is recommending that support for extending the Small Business Rate Relief Scheme should be provided out of public expenditure or the £1bn raised annually in rates in Northern Ireland.
The organisation's Northern Ireland chairman, Terence Brannigan, has responded to a consultation document on the issue by calling it an "ill-thought through proposal".
"This additional tax will make retail investment less attractive than anywhere else in the UK," he said.
"The consultation document fails to recognise that many of the retail properties impacted currently operate on very low margins - indeed, with some stores already in a loss-making situation, a 20% increase in rating costs will have a significant adverse impact. Published information reveals that retailers in the grocer and DIY sectors at UK-level typically operate on margins of around 5% yet we know that they face much higher operational costs already in Northern Ireland.
'Whilst the debate has been framed as a levy on out-of-town retailers, in order to stimulate and rejuvenate town and city centres, the published figures show that 62% of the premises affected are either edge of town or town/city centre properties - and Belfast city centre in particular will be hard hit."
Glyn Roberts, the chief executive of the Northern Ireland Independent Retail Association (NIIRTA), said: "It is disappointing that the CBI has come out against the Small Business Rate Relief Scheme and failed to recognise that these proposals have widespread support amongst local small businesses and independent traders.
"While the CBI make some constructive suggestions in their submission they simply do not understand the difficulty that thousands of struggling local small businesses have in paying their rates."
The consultation on Small Business Rate Relief Scheme closes on October 18.