Reliance Automotive Services owner Jon Waterhouse, 63, said he was seriously considering relocating his Fyshwick store to New South Wales because of rising rates.

Mr Waterhouse said his rates bill had increased from about $5000 to $15,000 in the past two years, as a result of the Barr government's taxation reform program.

"It's crippling my business," Mr Waterhouse said.

"It's not necessarily the money coming into my business that's the problem, it's the fact that there is nothing to hang onto at the end of the month."

Mr Waterhouse said he had reluctantly increased prices for customers after his accountant warned his Isa Street business would otherwise succumb to a "slow death".

"All I have to do is move three kilometres down the road to Queanbeyan. I've spoken with people there who have the same size block as me and they are paying $3500 in rates," he said.

"I'm a proud Canberran, I was born in Canberra Hospital. I've never left and I don't want to leave."

Mr Waterhouse said the business, which employs four people, was also struggling to compete with home-based mechanics, which do not pay commercial rates.

He has detailed some of the issues to an ACT Assembly inquiry, which is examining commercial rates in the ACT after a round of property re-evaluations sent rates soaring in suburbs across Canberra.

The inquiry's first round of public hearings heard Canberra's commercial property market was facing a "perfect storm" of challenges, including ballooning rates, tighter lending controls and high-vacancy rates for second-tier office space.

A total of 311 businesses in Phillip, Civic, Turner, Braddon and Fyshwick were hit with huge rate increases from July 2017, when property revaluations conducted in 2016 came into effect.

The rate rises were at their sharpest in Phillip, where some businesses reported hikes of $100,000.

Pedders Suspension's Phillip store manager Terry Patat said the rate rise appeared "unjustified", and had not been accompanied by an increase in government services for the area.

"We feel like we've been punished for something that we don't deserve just because the government's spending is ridiculous on things like the bloody light rail," Mr Patat said.

Mr Patat said he felt reluctant to pass on costs to Canberra motorist already being "slugged in every direction" by high fuel prices and registration fees.

He said moving the business to Queanbeyan to escape the rate bills was a genuine possibility in the long-term.

"It would not be a simple exercise, we'd probably need to pay $50,000 to relocate and then you have to pay to break the lease," Mr Patat said.

"I don't have exact comparison [for a similar business in Queanbeyan] but I know that it would be cheaper."

In the government's submission to the inquiry, Chief Minister and Treasurer Andrew Barr said many small businesses in the ACT paid less taxes than similarly-sized operations in New South Wales.

It was only "very large" ACT businesses, classified as those with an annual payroll of more than $2 million, which would have tax bills "approaching those payable" by businesses over the border, he said.

"When comparing across jurisdictions, it is also important to take into account the full range of state and local government taxes paid by businesses. Commercial rates are just one tax," Mr Barr said in the submission.

"The ACT government has abolished the commercial land tax, while stamp duty is being gradually phased out and has already been abolished for commercial property transactions below $1.5 million. The ACT's payroll tax threshold is the highest in the country at $2 million, meaning 90 per cent of businesses pay no payroll tax."

Mr Barr and treasury officials are scheduled to give evidence to the commercial inquiry on Friday.