NI corporation tax
THE ANNOUNCEMENT by the British government that it is willing to allow Northen Ireland to reduce its corporation tax rate to the level of that pertaining in the Republic is a moment not just of fiscal significance, but of some constitutional importance.
The possibility is outlined in a Treasury consultation paper, Rebalancing the Northern Ireland Economy, which sets out the likely advantages and costs of a reduction in the North’s 28 per cent rate to the Republic’s 12.5 per cent. The paper, whose main emphasis is on shifting the North’s state-dependency to private-sector-driven growth, suggests the effect would be to boost foreign direct investment to the North by a hardly overwhelming 6 per cent a year and to enhance growth prospects.