Belfast Telegraph

2018 target for cut to corporation tax 'could be put back till 2020'

By John Mulgrew

Northern Ireland may now not get a low rate of corporation tax until 2020, Invest NI's chief executive has told a major US news network. Speaking on CNBC's Squawk Box, Alastair Hamilton said the region is working to get a 12.5% rate "in the next two or three years".

In March, the Belfast Telegraph revealed that a date of April 2018 for the tax "may slip", according to the Department of Finance.

And earlier this month, Mr Hamilton acknowledged that the Northern Ireland economy was not likely to see the devolution of corporation tax until 2019.

Speaking on US television this week, Mr Hamilton said: "I think tax reform is coming. In terms of the manifestos in the UK, the main Conservative Party will continue to reduce corporate tax. The campaign is on to reduce that to 17% by 2020.

"We also have a proposition. We always want to stay ahead of the game. We have also just recently passed (an) agreement that would take our corporation tax down to 12.5% in the next two or three years."

That means the rate, due to be in place by 2018, may not happen until 2020.

"People (foreign investors) are not in Northern Ireland, they may be in the Republic of Ireland, for a tax differential, they are not in Northern Ireland for tax, we do not chase tax-sensitive projects.

"We did 60% more new inward invest projects into Northern Ireland than we did the year previous.

"They are in Northern Ireland to get access to talent and people. That is not affected at all by the Brexit piece.

"We don't attract profit centres because we don't yet have a tax proposition as attractive as some other parts."

And speaking about Brexit, Mr Hamilton said: "There are two sides to this.

"What do those tariffs and trade deals look like post the negotiations.

"We have a very large agri-food industry, therefore there will be sensitivities around that."

He said he welcomed the freeing up around State aid rules currently enforced under EU membership.

Last month, Mr Hamilton said that the delay in the devolution of corporation tax creates a "bit of difficulty" for some investors, but a lack of devolved government in Northern Ireland is "not a deterrent".

Asked if he was disappointed that the date for devolution had now slipped, Mr Hamilton said: "I think it was a pragmatic and realistic position.

"It got to a point where I think everybody realised that holding for an April 2018 (date), in the current political climate, was not deliverable. I welcome the fact that there has been clarity given to that position.

"I welcome the fact that there is still a really strong commitment to reduce the level, albeit an acknowledgement that the date will now move from April 2018.

"It creates a little bit of difficulty with some of the companies that we are talking to who were looking towards that April 2018 date."

Earlier this month, Invest NI said it helped to create 5,900 jobs in the past year and is aiming to add as many as 40,000 over the next four years.

Invest NI says it "promoted" 5,600 new jobs during 2016/17, in reference to job numbers which firms have pledged to create after receiving offers of financial support to create jobs and investment.

Offers totalled £152m for the year 2016/17, while the agency also said it had attracted 22 foreign direct investors to set up during the year, compared to 20 a year earlier.

Belfast Telegraph

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