Economic 'milestone' as new 12.5% corporation tax rate to be introduced from 2018
A more prosperous economy for Northern Ireland is a step closer after April 2018 was confirmed as the date for corporation tax to be cut to 12.5%.
After a lengthy campaign dating back to the 1990s, campaigners for a tax cut - to enable the province to compete with the Republic's low rate - were basking in success yesterday.
The corporation tax concession is part of a suite of financial measures in A Fresh Start - The Stormont Agreement and Implementation Plan.
The current main UK rate of corporation tax is 20% following cuts by Chancellor George Osborne - and its rate is due to come down to 18% in around five years.
But economist John Simpson cautioned that a low rate of corporation tax was just one attribute required to enable the economy to succeed.
And with the earlier target date of April 2017 now missed, PwC chief economist Esmond Birnie said: "The delay will unfortunately have done some credibility damage to the Executive's reputation, and we now know that UK-wide rates are to come down to 18% by the end of the decade."
But Eamonn Donaghy, the main campaigner for a lower rate of corporation tax in recent years, and the head of lobby group GROW NI, said low corporation tax would help build "a sustainable and prosperous economy".
"Future employment growth will only come from the private sector and reducing the rate to 12.5% will create tens of thousands of jobs in local, national and international companies across cities, towns and rural areas throughout the region," he added.
He praised others who had contributed to the long campaign for the tax cut, with the Republic's policy as a key factor in the Republic's success in attracting foreign direct investors such as Apple, Facebook and Google.
Mr Donaghy singled out the late industrialist Sir George Quigley, who was the first campaigner for lower corporation tax here but who sadly died in 2013. "His inspiration and vision in the face of trenchant opposition from many quarters is finally realised," Mr Donaghy said.
Martin Fleetwood, tax partner at business advisers PwC, said the clarity "will permit Invest NI to begin promoting the lower rate in its marketing efforts and encourage companies to ensure that they are compliant".
But he added: "The announcement may not bring absolute certainty as it's understood that the rate and the date may be conditional upon the Executive demonstrating that its finances are on a sustainable, long-term footing, as well as successfully implementing measures contained in both the Stormont House Agreement and yesterday's agreement."
Linda Brown, director of the Institute of Directors in Northern Ireland, welcomed the clarity over a date, but added that earlier implementation would have been preferred.
"As a region, we have been working to build a skilled labour force, and introducing a lower rate of corporation tax than the rest of the UK will provide an added incentive for leading global companies to locate here, which in turn will deliver thousands of jobs and support the local supply chain," Mrs Brown said.
And Sean Lavery, partner at business advisers BDO NI, added: "We have campaigned alongside the wider business community for reduced corporation tax for more than 10 years, and this news is very welcome.
"This has the potential to be the significant economic intervention Northern Ireland has needed in order to move towards sustained widespread economic growth. This is a milestone day for the economy of Northern Ireland."