There will be no cut in corporation tax in the lifetime of the current Northern Ireland Assembly, Finance Minister Sammy Wilson has predicted. That would mean that a reduction in CT rate could not be introduced before 2015.
Mr Wilson told MLAs: “Many people argue that the certainty that the tax rate will be down to a certain level by a certain time will influence investment decisions. As there is a long lead-in for investment decisions, I do not believe that we will see a reduction in the rate of corporation tax within the lifetime of this Assembly. It will come after that.”
The Federation of Small Businesses responded that it was essential to begin preparation for a rate cut. Wilfred Mitchell, FSB policy chair, said: “Cutting corporation tax in Northern Ireland is an essential element in getting our economy back on track Our politicians and businesses have made their feelings and support known. What we need to see now is a definite decision being made on the principle of this initiative being introduced to allow businesses ample time to prepare for its eventual implementation.”
Mr Wilson also told the Assembly the Executive did not have clear proposals for introducing either a single enterprise zone for Northern Ireland, or zones located in areas in highest deprivation. “The [UK] Government have designated a number of areas in other parts of the United Kingdom as enterprise zones,” said Wilson. “I am still not quite clear as to what exactly they mean by an enterprise zone in relation to Northern Ireland.
“At one stage, the Secretary of State felt that the whole of Northern Ireland could be an enterprise zone. I do not think that that is really a practical proposition, but we will look at what is happening with enterprise zones in other parts of the United Kingdom and at what allowances there are for planning and capital and so on.”
The minister added: “Our past experience of enterprise zones has been that they do not generate additional employment; it is more a case of displacement, with firms moving from one side of the line to the other. I am not so sure that that would be a satisfactory way forward.”