Favourable tax systems for businesses in Northern Ireland must be transparent and open: no 'shady deals'
Favourable tax systems for businesses operating in Northern Ireland must be transparent and open, according to a campaigner.
Eamonn Donaghy, head of tax at KPMG Belfast and spokesman for Grow NI, a campaign to devolve corporation tax varying powers to the Northern Ireland Assembly, was speaking as a new report said that Ireland's business tax system is the "most effective" in Europe.
PwC and the World Bank found that the real corporation tax rate in the Republic stands at 12.4% while the red tape associated with paying tax in Ireland compares favourably with just about every other EU country.
The report shows that Ireland's official corporation tax rate is the closest to the "real rate" out of all Eurozone countries, with a difference of just 0.1% between the official 12.5% rate and real rate of 12.4%.
According to the study, a typical Irish company spends nearly half of its total commercial profit in taxes, spends two weeks dealing with its tax affairs and makes a tax payment nearly every six weeks.
Globally this compares to the typical company paying over a third of its commercial profit in taxes, spending over seven weeks dealing with its tax affairs and making a tax payment every two weeks.
Mr Donaghy said that with the Republic coming in sixth place out of 189 countries polled, it is well regarded as a country where tax does not "interfere with the bottom line".
The Republic has been coming under strong pressure to raise its rate, from other European countries which see it as a tax haven.
In Northern Ireland, business leaders say lowering our own corporation tax rate from 21% would increase competition, inward investment and jobs.
"Businesses regard tax as a cost to the firm, in more ways than one," Mr Donaghy said.
"Firms want to minimise costs, tax takes money from the business and dealing with tax costs additional time and money.
"The Irish economy is set up to facilitate businesses, with low tax and an easy administration system. It does what is says on the tin, there are no hidden reliefs and the headline rate is pretty much what firms pay."
Last week Prime Minister David Cameron gave his strongest hint yet that new powers to set corporation tax rate in Northern Ireland will be announced in less than two weeks.
Mr Cameron told the Commons Liaison Committee that the argument for devolving the business tax to Northern Ireland was "strong".
He said the case here was different from elsewhere in the UK because of the land border with the Republic.
Mr Donaghy added: "As the first part of the campaign to lower corporation tax draws to a conclusion, we can see that there is no benefit in trying to pull a veil over anything, openness and transparency are key.
"There is nothing to be gained by shady deals or by saying one thing and doing another. A simple, transparent system will be the big winner, not a large and opaque system."