Northern Ireland 'toxic' to investors if 12.5% tax rate is lost
Northern Ireland risks becoming "toxic" to investors and damaging its global business reputation if it cannot deliver a low rate of corporation tax, business leaders have said.
There is renewed anger in the business community here after the Belfast Telegraph revealed that an April 2018 deadline for the devolution of corporation tax "may slip" - in the words of the Department of Finance.
And despite months of luring major foreign investment on the premise that Northern Ireland will have a lower 12.5% rate from April next year, Invest NI has admitted it will "amend its international sales and marketing activity to reflect this".
Angela McGowan, regional director of the CBI, told the Belfast Telegraph: "CBI member companies recognise that Northern Ireland's international reputation is compromised when politicians commit to policy actions and then fail to deliver them."
And economist Andrew Webb said there is "increasing sense that we have had all our eggs in one basket" over the "policy jewel in the crown for the last Executive".
He warned Northern Ireland runs the risk of "becoming toxic to potential investors".
Invest NI has now removed a reference to the April 2018 date for devolving the tax here.
It was continuing to promote the date for a 12.5% rate as recently as last week.
Ann McGregor, chief executive of Northern Ireland Chamber of Commerce and Industry, said: "If Northern Ireland loses out on the chance to achieve this (corporation tax) because political parties remain in a position of stalemate, then the region will have lost the best opportunity ever to attractive inward investors and in the process create jobs."
And the UK government also warned that the devolving of corporation tax powers cannot happen under direct rule.
A spokesman for Grow NI, the business body set up to campaign for corporation tax devolution, said: "Legally and politically speaking we are not at the end of the road yet in regard to the 2018 date for a lower rate.
"However, the new rate does require legislation to be introduced by the Finance Minister and then voted on by the Assembly and as things stand we have neither an Assembly or a minister."
Invest NI reiterated it "will continue to promote the commitment to a reduced rate of corporation tax and the additional benefit this will have on investment projects".
Linda Brown, director of the Institute of Directors Northern Ireland, said: "Concerns that the planned April 2018 date for implementation may slip creates uncertainty which does not help businesses hoping to expand, or Invest NI as it sells Northern Ireland to foreign direct investors."
Stephen Kelly, chief executive of Manufacturing NI, warned that any delay in agreeing the rate "will be will be damaging to both our international reputation to investors overseas and plans by local firms to make critical business investments in new machinery, production lines and market development."
And John Armstrong, managing director of the Construction Employers' Federation, said that the "mixed message we are sending to potential investors, both local and global, about our corporate taxation regime is doing little to give businesses the much needed certainty that they require".
Retail NI chief executive Glyn Roberts said: "It is clearly disappointing that April 2018 is looking like it will be delayed."
Ms McGowan said that "despite the current disappointment, it is important to focus on the fact that widespread support for a reduced corporation tax rate remains strong and indeed the current political impasse along with all the associated economic implications could potentially be resolved."
In March last year, former First Minister Arlene Foster and Deputy First Minister Martin McGuinness joined Invest NI boss Alastair Hamilton on a trade trip to the US to promote the 12.5% rate.
The campaign even drafted in Ballymena's own superstar Liam Neeson, who said "the commitment of the Northern Ireland Executive to reduce the rate of corporation tax to 12.5% from April 2018 really is a potential game-changer for our economy."
Ms McGregor added: "It is more important than ever that Northern Ireland continues to sell itself as an attractive location for inward investment based on the combination of tax, talent and value in light of the UK's exit from Europe.
"Therefore it is crucial that a lower corporation tax rate is implemented by 2018 and that we prioritise investment in talent."