Negotiations between the Executive and the Treasury over the devolution of corporation tax powers to Northern Ireland are at a critical stage, Stormont's Finance Minister has said.
But Sammy Wilson said he believed the Exchequer's assessment of how much would have to be sliced off Northern Ireland’s block grant if the rate was cut here was still too high.
If the tax was decreased from the UK-wide 24% maximum to the 12.5% that currently applies in the Republic of Ireland, the region could face losing an annual £700m chunk from the Treasury by 2027.
Mr Wilson told the Assembly there were also outstanding issues to be resolved on what proportion of any additional revenue raised thanks to the economic and job stimulation move could be retained in Northern Ireland.
It could mean increased national insurance, income tax and VAT receipts. He insisted he and fellow Executive ministers were still committed to taking control of corporation tax powers — but warned it would ultimately come down to a political decision by the UK Government.
“The joint ministerial working group considering the devolution of responsibility for corporation tax to the Northern Ireland Executive is now, in my opinion, entering a critical stage in its deliberations,” he said during ministerial question time.
“While some progress has been made in respect of how a devolved rate would operate in practice and the implementation timetable, I remain concerned about the cost currently proposed by Treasury officials — which I believe is prohibitively expensive.
“At the same time I would like to reassure members that my Executive colleagues and I on the working group remain fully committed to taking responsibility for corporation tax, while my strong belief is that the issues around cost can be addressed.”
Mr Wilson said it was vital a yes or no decision was made this autumn given the current economic crisis and to provide certainty for potential investors.
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The Executive believes that cutting corporation tax here to 12.5% could generate an additional 58,000 jobs by 2030. But there are concerns that neither the Treasury nor the Tories are fully committed to the plan, particularly now that Owen Paterson is no longer Secretary of State.
There are also suspicions that the Conservatives fear the SNP will seize on the idea of devolving the tax to the Scottish Parliament, too, in the run-up to the referendum on independence.