Northern Ireland corporate tax rate cut plea for SMEs
Published 26/11/2010 | 08:00
The Ulster Unionist Party has proposed excluding banks from a future business tax cut in Northern Ireland.
In a detailed document, the party raises the idea of limiting the scope of a future corporation tax reduction. It suggests "large and stable companies" like banks and utility companies continue to pay the full rate.
The UUP paper sets out a range of proposals in response to Westminster's comprehensive spending review and stresses that Stormont be given the power to lower corporation tax. Secretary of State Owen Paterson has promised a government paper examining the feasibility of the plan by the end of the year.
Business groups have been lobbying for corporation tax to be cut from 28% to match the Republic's 12.5%, widely credited with creating the Republic's once-booming Celtic Tiger economy.
But the cost of this would have to be met from the Executive's squeezed funding pot. The party's document states: "Whilst there are clear benefits to reducing corporation tax there are also considerable risks." It says the possibility of excluding banks and utility companies should be explored.
Focusing a reduction on small and medium sized enterprises and inward investment "would greatly reduce the burden on the Executive and target those businesses most in need", it adds.
The UUP also proposes a two-year pay freeze for civil servants earning above £26,000; privatising MOT tests; charging civil servants £5 a week for car parking; privatising the Forest Service; a "debate" on domestic water charges; and prioritising spending on health and social care services.