The charge has quadrupled from around $20,000 in 2014-15 to more than $80,000 in 2019-20, an increase general manager and part-owner David Quinn described as "clearly unconscionable" in a submission to a parliamentary inquiry on commercial rates rises.

"The impact of the rising rates is causing significant hardship and risking [the] viability [of] our small business," Mr Quinn wrote.

"Coupled with the rising cost of electricity and wages, the costs of doing business are too great."

The bigger bill related to a huge increase in the average unimproved value of the property, which tripled from $473,000 in 2014-15 to $1.4 million in 2019-20.

The pub underwent a major refurbishment in 2016, in which the building was completely gutted, and a new restaurant added downstairs along with a rooftop bar.

But the bill also comes as the ACT government is phasing out some taxes in favour of higher land taxation.

Forty-four per cent of the increase in commercial rates revenue is because of the reform, while 37 per cent is due to the growing number and value of commercial properties in Canberra.

In the case of the Duxton though, it was hit with a backdated bill for $18,000, which had to be paid in one instalment.

"This caused considerable impact to cash flow and [is] impossible to budget for," Mr Quinn said.

Liberal politician Nicole Lawder asked Chief Minister Andrew Barr during the inquiry on Friday how the increased charges to places like the Duxton could be squared with the government's mission to encourage vibrancy in Canberra.

Mr Barr said land tax was "the least-worst" tax a government could collect.

"Any assessment of the relative economic efficiency in terms of both revenue predictability and whether a tax will distort an investment decision would show that land-based taxes have the least economic distortion, are the hardest to avoid and are the most predictable in terms of their revenue, to the other extreme of transaction-based taxes being the most economically distortive," Mr Barr said.

"We have a payroll tax regime that has a very high threshold which excludes most businesses and does have a high rate for those who do pay it, so it is very much a tax in large part on national and multinational level operations, and then we have our taxes on land.

"For that specific business, if they were operating in another jurisdiction they would be paying higher taxation on their labour and capital and possibly less taxation on their land, although that would vary depending on where in the country and where in the world they operated.

"But the fact that they would be able to employ more people and not hit the payroll tax threshold would be a specific advantage of operating in the ACT, and that is a policy setting that has been put in place to encourage employment."