Belfast Telegraph

Editor's Viewpoint: Northern Ireland needs a fairer deal on tax rates

The interdependence and intertwining of the economies on these islands has been sharply underlined in recent days as the fortunes of the Republic of Ireland have plummeted.

Although the UK is facing record national debt levels, the Government pledged a generous £7bn towards helping underpin the Republic's banks, describing the country as a friend in need. Another €80bn is coming from Europe and the International Monetary Fund.

This is no time to smirk at the economic misfortunes of the Republic. It is an important trading partner and southern shoppers and investors, in recent years, have contributed significantly to the Northern Ireland economy. The need to ensure that the Republic recovers economic stability is so obvious as to hardly need stating.

But there will be many who will welcome the issue raised by First Minister Peter Robinson yesterday when he questioned why pressure was not being applied to the Republic to alter its corporation tax rate to bring it into line with the UK and other major European economies. The low rate of tax was a major enticement to foreign investors who flocked to the Republic as a gateway to the EU marketplace.

However, other EU countries, as well as the UK, feel that it gives the Republic an unfair advantage as an economic investment destination. Nowhere is that advantage more keenly felt than here. Mr Robinson is not seeking to kick the Republic when it is down, but rather pointing out that it still retains a tax incentive which disadvantages the province.

It would seem only just that either the Republic is encouraged to raise its corporation tax rate or that Northern Ireland - as a neighbour with whom it shares a land border - is allowed lower its own rate by the UK Treasury.

If we are all in this recession together, as we are being told, then allowing us to operate on a level playing field would seem a fair deal.


From Belfast Telegraph