Belfast Telegraph

Corporation tax 'could transfer'

Northern Ireland political leaders have been handed a government paper on devolving corporation tax powers to the region.

The proposals will be considered by parties over the Christmas period before the long haul to have any agreement and legislation put in place.

Estimates suggest it could take at least a year if not longer to introduce measures which might allow Northern Ireland to compete with the Republic of Ireland's low corporation tax rate.

The rate in the Republic currently sits at 12.5%, compared to 28% in the UK.

Secretary of State Owen Paterson noted that when the International Monetary Fund (IMF) and European Union negotiated the 85 billion euro (£72billion) bailout for the Republic's struggling economy, the Irish government protected its tax rate as a priority.

He said of the potential change for Northern Ireland: "I have obviously been an enthusiast

"And seeing how the Republic of Ireland fought absolutely tooth and claw to hang on to their right to set tax and to grow their own cake, and to bring in foreign investment, I would hope that local politicians, should they be given this power, would be bold and would take really radical steps."

There have been arguments that Northern Ireland needs a greater level of flexibility to compete with the Republic, but also to help develop its relatively small private sector, and help reduce its over-sized public sector.

Other UK or European Union regions may yet object to the proposal.

Stormont politicians may also be wary of any central government cut to the Stormont block grant in return for taking on the tax power.

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