Corporation tax powers in politicians' hands
At last local control over the rate of corporation tax looks like becoming a reality. The legislation to devolve to Stormont the power to vary the rate was published yesterday which could make January 8, 2015 a landmark date in the history of Northern Ireland.
There is widespread agreement that lowering the rate of corporation tax to the 12.5% which replicates the Republic's rate has the potential to transform our economy.
This newspaper has been a long-term advocate of the move which it believes could revitalise the private sector and help rebalance the economy.
But there are still obstacles to be overcome before devolution of the tax-varying powers becomes a reality. Not least is the time pressure which means that the Bill has to go through the House of Commons before Parliament is dissolved on March 30.
As well as that, local politicians have to fulfil a number of obligations such as agreeing a final budget for the coming financial year and pressing ahead with welfare reform. Crucially, they have to convince the Treasury that they are financially competent to be given the new powers.
Amid the euphoria which accompanied yesterday's publication of the Bill, it has to be remembered that this is not a magic bullet. Certainly in the Republic it has in the past proved to be a lucrative lure to foreign investors and the hope is that others could be convinced to come here.
But there is a price to pay. If the rate of corporation tax is dropped and the revenue decreases - as is almost inevitable initially - then the difference will be taken out of the Northern Ireland block grant which could mean further austerity in the short to medium term. On the plus side, if the move does attract new investors, any extra revenue gained will be available for investment in the local economy, the outcome that most people hope will eventually ensue.
There will be safeguards to ensure that companies don't just set up the so-called brass plate operations here to avail of the lower tax rate. These would be virtually shell operations contributing little if anything to the economy but used as a channel to lower the tax liability of the companies involved.
It is now up to the politicians to seize this opportunity to convince foreign investors that Northern Ireland is a good place to do business.