Irish budget is a 'wake-up call for Northern Ireland'
The Republic of Ireland's budget is a clear sign the "country is well and truly back from the brink" and is a "stark reminder" Northern Ireland must play catch up, an economist has said.
The Finance Minister Michael Noonan delivered his budget yesterday afternoon, which included changes to the hated Universal Social Charge, the introduction of a €550 (£410) tax credit for small business owners and a retention of a lower rate of Vat for hospitality.
It also included a low tech-related 6.25% rate of corporation tax to apply to profits arising from certain patents and copyrighted software which are the result of R&D carried out in the Republic.
Northern Ireland is already competing with the Republic's lower rate of corporation tax, which is one of the main reasons business groups here have long campaigned for its devolution to Stormont.
Danske Bank chief economist Angela McGowan said: "The country is well and truly back from the brink, with economic growth outpacing every other European country and indeed outpacing the UK and the US.
"The low Vat rate for hospitality in the Republic was also maintained. There is wide acceptance that this supportive tax rate had created thousands of jobs in the last few years."
She said while Northern Ireland is "still struggling after several years to get a reduction in local corporation tax levels, the Republic of Ireland is now miles ahead".
"Other sectors were given support in this budget too. Transport saw a large reduction in commercial motor tax and the agri sector will benefit from plans to make it easier to transfer farm ownership," she said.
"In order to support the film industry there was further tax credit support to encourage larger budget productions of film and television shows produced in Ireland.
"Finally, this budget also gave a further push to stimulating entrepreneurship and self-employment within the Irish economy. Overall, the budget was a business and family-friendly one.
"For Northern Ireland, though, it serves as a stark reminder that there is lots to do in terms of our economy. While we stand still, everyone else is gearing up."
Colin Neill, chief executive of Hospitality Ulster, said the continued lower Vat rate meant Northern Ireland "still remains at a competitive disadvantage" with the Republic.
"The Vat rate in the UK is still far too high and it really is time for change," he said.