Belfast Telegraph

Overseas investors put off by failure to cut corporation tax

By Staff Reporter

Companies are delaying setting up and bringing jobs to Northern Ireland because of the failure to bring in a lower rate of corporation tax, it's been claimed.

Eamonn Donaghy of pressure group Grow NI - which represents businesses across Northern Ireland and has been pushing for a lower rate - said evidence is emerging that companies abroad are deferring plans to invest in Northern Ireland due to the continued failure to introduce the rate.

Some firms - both those who already operate here and newcomers - were even abandoning plans altogether.

The lack of progress on corporation tax was putting jobs growth at risk, Mr Donaghy said.

Northern Ireland's current main rate of corporation tax is 20%, along with the rest of the UK.

The Republic's historically low rate of 12.5% has been cited as one of the factors allowing it to attract more inwards investment - so groups like Grow NI have been campaigning for Northern Ireland to be able to set its own rate of corporation tax.

Chancellor George Osborne has said that Northern Ireland can have the power devolved - but only if it agrees on a Budget and Welfare Reform.

However, the Welfare Reform Bill collapsed this week.

Mr Donaghy said: "The power to create tens of thousands of jobs is now within our grasp but unless our politicians seize this opportunity it will jeopardise significant employment growth opportunities and will increase inequality in Northern Ireland.

"Continued uncertainly around a start date and an agreed rate of corporation tax means that the private sector cannot compete on a level playing field with businesses in the Republic of Ireland."

He said that having the same rate of corporation tax across Ireland was the "only" way of having any significant increase in employment in Northern Ireland.

"Such a change would see increased investment from companies at home and abroad, creating jobs which are much needed in communities everywhere."

The levy powers could be in the hands of Stormont by April 2017 - allowing Northern Ireland the chance to lower the business rate, bringing it in line with that of the Republic.

But with an uncertainty over power-sharing government, that decision by Westminster could be delayed or put on ice.

The CBI in Northern Ireland has also urged politicians to agree on welfare reform. Director Nigel Smyth said: "There is the potential to secure the devolution of corporation tax powers that are almost within our grasp. Only with these powers can we maximise our attractiveness and potential as a place you can do business and invest in.

"Only with these powers can we secure the economic and societal transformation that is key to all our futures, raise our living standards and help move people out of welfare and into work."

Belfast Telegraph

Popular