Is corporation tax fight a damp squib?
It's time to look at other ways says consultancy chief
Published 12/06/2013 | 04:20
THE focus for rejuvenating Northern Ireland's economy should move away from the debate over lower corporation tax, according to one of Ireland's most senior business advisers.
Mike McKerr, managing partner of Ernst & Young in Ireland, said other answers must be sought to the question of how to rebalance the economy.
First Minister Peter Robinson said he hopes an economic pact due to be published by Westminster later this week, will contain a provision that a corporation tax cut from the present 23% level would be implemented in the current Assembly's lifetime.
The Treasury has said that it will give a decision in September next year on whether Northern Ireland can be granted the power to set its own rate of business tax, which supporters say will enable it to compete more effectively with the Republic, which has a rate of 12.5%.
Speaking about the long-running campaign to cut corporation tax, Mr McKerr said: "I think we need to think through why it has practically been so different to get it over the line."
The question of how to fund the gap between lower tax and profits which would hypothetically be generated was "tough".
"Until you have an answer to that I think the Executive will find it much more difficult to actually go ahead with it, much as they would like to."
Mr McKerr said: "What they do have to do is to think if there are other things we can do in the meantime that would encourage enterprise.
"Are we brave enough to say that if you employ more people you don't pay employment taxes? Do you give people capital gains relief if they invest in businesses and then make a success of it?
"Will we increase the rate of research and development tax credits? Maybe we just need to say: 'right, corporation tax is gone for some time and we need to focus on other specific initiatives that will really drive enterprise'."
Mr McKerr was speaking to the Belfast Telegraph at the firm's World Entrepreneur of the Year final in Monte Carlo.
It was won by Hamdi Ulukaya (right), a Turkish immigrant to the US whose Greek yoghurt Chobani has become the US brand leader with annual sales of $1bn (£0.64bn) just six years after he set up the business.
He beat entrepreneurs from 46 countries – including Ireland's 2012 winner Edmond Harty of farm equipment company Dairymaster.
Seven Northern Ireland entrepreneurs jet off today along with some 100 Irish business people for a business retreat in the US. They are among the 24 finalists in this year's Ireland Entrepreneur of the Year competition. They are Mark Godfrey and Simon Cole of data company Automated Intelligence, Colin Williams of animation firm Sixteen South, Peter Dixon of Kellen Investments, the owner of Phoenix Gas, Eleanor McAvoy of Budget Energy, Seamus McKeague of Creagh Concrete and Martin Hamilton of food firm Mash Direct.