Would-be pub and bar owners who fail to pay their business rates could find it harder to open new licensed premises.
Under current law, a licensing authority is not able to take into account whether a person looking to open a new business, is up to date with rates.
St Edmundsbury Borough and Forest Heath District Councils have had occasions where they had little choice but to grant a licence, even though they knew the applicant owed business rates dating back several years.
The two councils have lobbied the Government for a change to the licensing laws and now have the backing of the Local Government Association. It is seeking the changes as part of its submission to Chancellor George Osborne for inclusion in his Autumn Statement next Wednesday.
David Ray, St Edmundsbury cabinet member for resources and performance said: “It angers both the council, and the hardworking honest folk, when they see someone who has not been paying their rates, simply allowed to open up a new business.
“It is a ludicrous situation but one where our hands have been tied.”
His Forest Heath counterpart, Stephen Edwards, said: “Many councils have come across these cynical business men and women who pay all of their bills apart from business rates because they know they will still get their licence.”