First Minister advocates 10% corporation tax rate
Northern Ireland's corporation tax should be lowered to 10%, First Minister Peter Robinson said in Belfast yesterday.
Speaking at the first of the Northern Ireland Chamber of Commerce's 5 Leaders, 5 Days events, Mr Robinson said a reduction from the current rate of 26% is needed to help create jobs and boost the local economy through foreign direct investment and the growth of indigenous companies.
By pinpointing a reduction in the tax businesses pay to 10%, the DUP leader was going further than many other politicians and economists, who want a cut to allow Northern Ireland firms to operate on a level playing field with the Republic at 12.5%.
And he was confident the European Union was happy that Northern Ireland is to be given special dispensation to other UK regions.
"There's always the excuse that the EU and Azores Ruling meant you couldn't cut corporation tax in Northern Ireland. We've clearly established we can," he said.
But there remains a battle with the UK Treasury in terms of what the reduction in the block grant should be. Despite this, he pointed to the "second and third tier" benefits of a tax cut in terms of additional national insurance and a reduction in the level of benefits as more jobs emerge.
If a cut in corporation tax is allowed, Mr Robinson advocated a delay in its implementation followed by a phased reduction to avoid an impact on Northern Ireland's block grant.
"If I go to the US and speak to a company tomorrow, it will take them 18 months to two years to get set up and on that basis many of them will be content in a delayed reduction," he said.
"We want to gradually bring our corporation tax down. If we start tomorrow with a lower rate of tax it would reduce the block grant by £200,000m to £300,000m.
"If we delay and phase it in, it means that by the time we get to implementation we will have been getting additional tax revenue in."
Questioned on the subject of Airport Passenger Duty (APD) by Belfast International Airport chief executive John Doran, Mr Robinson said the Treasury needs to recognise there is again good reason to allow Northern Ireland to be able to compete with the Republic
APD is due to be reduced to €3 from €10 in the Republic, while in Northern Ireland and the rest of the UK it can reach well over £100 per flight per person for the longest flights.