Treasury report set to reveal if Northern Ireland can cut corporation tax
The Treasury will tomorrow give its position on whether Northern Ireland can set its own corporation tax rate, a move which could eventually result in improved prosperity for Northern Ireland.
A joint Treasury/Northern Ireland Office document on rebalancing the economy will be presented by the Secretary of State Owen |Paterson.
It is understood that the report takes a neutral view on whether the Assembly should be allowed to set its own rate.
Finance Minister Sammy Wilson yesterday confirmed that he had seen a draft version of the document.
Mr Wilson said the paper would make reference to some provisions of today’s Budget, including air passenger duty increases, widely expected to be frozen by George Osborne.
“Arlene Foster and I have lobbied very hard on this with |reference to flights between Belfast International and North America,” Mr Wilson said.
The draft document referred to corporation tax, he confirmed — but he would not reveal the |position the report took.
“Whether or not its favourable depends on which side of the fence you are on.”
The minister said he was hopeful about what the four-month period of consultation into the document would bring.
“Obviously whatever’s in it will hopefully be subject to change.”
A spokeswoman for the NIO said she would give no details on the paper but added: “The Treasury is intending to publish a government consultation paper on rebalancing the Northern Ireland economy as soon as possible after the Budget.”
Business groups have been saying for some time that an announcement on corporation tax is on the horizon.
Rob Heron, a tax partner at business advisers Ernst & Young, said: “If corporation tax-raising powers are devolved to the Assembly or indeed there is a signal of such an intention, this would clearly be a positive tangible step for the region.
“The onus would then be on the business community, Assembly and wider stakeholders in Northern Ireland to have a full and informed discussion as to the merits of a reduced corporation tax rate including the various options and timescales for implementing such cuts.
“Certainly one option which needs to be fully explored is the impact of a phased rate reduction. We must now await confirmation of the details of what is proposed.”
Ian Coulter, vice-chairman of the CBI in Northern Ireland, said the corporation tax issue was about “job creation”.
“Not only would it assist greatly in the attraction of foreign direct investment but it would bring beneficial support to indigenous companies in growing and creating further jobs as they seek new export markets.”