The City of St. John's has decided to get rid one of its business taxes, although that doesn't mean the private sector will be getting an overall break on their next municipal billings.

The business occupancy tax is being eliminated in favour of an increase in commercial property taxes.

Coun. Danny Breen, who chairs the city's finance committee, said the move will increase efficiency at city hall.

"It just makes for a more streamlined tax approach," he told CBC News.

"We would have less tax billings to send out. We'd be billing only the property owner."

The elimination of the business occupancy tax means that companies that don't own their own property will no longer have to pay city taxes.

However, landlords can charge them higher fees to offset the increase in their property taxes.

"We'd be billing only the property owner who would then have the ability to recover that occupancy tax from their tenants," Breen said.

The business occupancy tax accounted for about $25.5 million in the current city budget, or about 20 per cent of overall spending. By contrast, the business realty tax accounts for 24 per cent of the budget.

The city, though, expects that the businesses will still pay about 44 per cent — that is, the same portion as this year — in the 2013 budget.

Residential taxpayers pay about $70.6 million, or 56 per cent, of the city's budget.

The change takes effect on Jan. 1, at the beginning of the tax year.

The city is required by law to deliver its budget before the end of December.