The Welsh Government has told Caerphilly Observer it is looking at improving the business rates system as part of a wider tax reform.

Labour’s Shadow UK Chancellor Rachel Reeves made a commitment to scrap non-domestic rates in England when she addressed the recent party conference in Brighton.

Following that pledge, the Federation of Small Businesses in Wales called on the Labour-controlled Welsh Government to follow suit and start consulting on a fairer system.

FSB Wales Policy Chair Ben Francis said: “The fact remains that business rates is an arbitrary and regressive system and is no longer fit for purpose.

“It hits smaller businesses disproportionately hard and before they’ve made a pound in turnover or profit. It is one of the major barriers to resolving some of the challenges we see on our high streets.”

He added: “Welsh Government’s focus on revitalising and reshaping our towns and high streets is very welcome.

“However, we can only begin to map that journey if the basic building blocks are in place which includes finally addressing this issue.

“This would provide reassurance for businesses on the high street and those organisations looking to move into our towns to take up the vacant space which is a blight on our high streets and dents the confidence of communities.

“There is an opportunity now to move this conversation forward as part of a longer-term vision for recovery and a sustainable economy in Wales, rooted in building local economic communities and reinforcing the role of small businesses within those communities.”

Earlier this year the Welsh Government extended the business rates holiday in Wales for the retail, leisure and hospitality sectors.

Combined with other reliefs, more than 70,000 businesses will continue to pay no rates at all in 2021/22.

Caerphilly Observer asked the Welsh Government if it had plans to reform business rates.

In a statement, a spokesperson said: “The Welsh Government is committed to building a stronger, greener and fairer Wales and we are developing an ambitious programme of tax reform that can support a stronger economy, more sustainable communities and vibrant public services.

“Within this we are considering how to improve our non-domestic rates system, while sustaining vital revenue for the local services which bring significant benefits to people. We will continue to work closely with stakeholders across the ambitious programme of tax reform we have.

“We have already provided significant business rates relief during the pandemic including a rates holiday for the retail, leisure and hospitality sectors for this full financial year.”