Corporation tax could be lowered before end of 2012
Treasury sources have said that a lowering of corporation tax in Northern Ireland could happen next year.
Corporation tax is at 28% in the UK but only 12.5% in the Republic of Ireland.
Broadcaster Andrew Neill said on television yesterday that the treasury had long been against different rates of corporation tax within the UK. But he said senior treasury sources revealed that the London government is minded to grant Northern Ireland its wish for a lower rate.
“Although it might not be allowed to go as low as 12.5%, since Ireland is under EU pressure to raise it, any decent cut would make Northern Ireland more attractive to private enterprise,” he said.
Campaigners for the move argue that bringing the tax in line with the Republic could help|invigorate the economy here. SDLP leader Margaret Ritchie said her party had long supported the idea of “equalising” corporation tax between Northern Ireland and the Republic.
“When an investor comes here from the US or the far east, they will go to the region that has the lower level of corporation tax,” she said. “Hence the south of |Ireland has seen many good |examples of foreign investment and we in the north have lost out.”
DUP MLA Peter Weir said cutting corporation tax would be something that should be “phased in”. He said: “There are implications with regard to corporation tax. I would like to see this as something which takes place over the life of the next assembly”.
East Belfast MLA Sir Reg Empey also welcomed the news.
The former Ulster Unionist leader said: “At the last election the UUP called for the transfer of tax varying powers to the Northern Ireland Assembly and the establishment of an Enterprise Zone in Northern Ireland. Where Ulster Unionism has led, others have followed and it is interesting to see other parties try to claim credit for our achievements.”