Business leaders react positively to report that is a step in the right direction
Business leaders have issued a broad welcome to recommendations in a Westminster committee report to reduce Northern Ireland's corporation tax rate, while recognising challenges lie ahead.
The move would bring the current rate of 26% into line with the Republic's, set at 12.5%, making Northern Ireland more competitive in terms of attracting foreign direct investment.
The UK's Chartered Institute of Taxation (CIOT) has said that the devolution of tax-setting powers to Northern Ireland would bring both challenges and opportunities.
Brendan Morris, chair of CIOT's Northern Ireland Branch, who gave evidence to the Northern Ireland Affairs Committee inquiry, said that the aim to attract more businesses here will be offset by potential administrative burdens that a split rate of corporation tax around the UK could impose on businesses.
"If a corporation tax rate cut worked, that would mean more companies choosing to locate themselves in Northern Ireland, generating more income tax, national insurance, business rates and VAT," he said.
"This could be a real boost to the Northern Irish economy but it would not be a one way bet. There is no guarantee that the books would balance in the Executive's favour."
The Chartered Accountants Ulster Society said that the report concludes positively.
Chairman Michael Black said: "Our members represent all business sectors in Northern Ireland and can play a key role in building a strong and sustainable local economy for Northern Ireland as an essential component in ensuring a better life and greater opportunities for all within our society.
"I would now ask our members to take the time to respond positively to HM Treasury's consultation process and to continue to engage in the process going forward."
Nigel Smyth, director of the CBI in Northern Ireland, said that the report addresses a number of implementation and administrative issues.
"None of these appear insurmountable; they just need to be effectively managed," he said.
"The committee also recognises, rightly so, that a lower corporation tax rate is not a panacea for Northern Ireland's economic and social problems and there is a need to address key issues including planning, education and skills, which are the responsibility of the Executive.
Roger Pollen from the Federation of Small Businesses also gave evidence to the Northern Ireland Affairs Committee.
He said: "The report seems to be a fair reflection of the issues, showing they have been well aired and understood. It does not pretend that the matter is straightforward, but it recognises the merits in agreeing in principle to devolving the powers then settling down to the massive and doubtless costly task of working out exactly how it could be achieved."