NI Corporation Tax reduction can’t happen

I was astounded to see media reports suggesting the UK Prime Minister is about to reduce Corporation Tax in Northern Ireland. This shows a basic misunderstanding of devolution – and of politics.

The UK Government has never claimed to have the power to reduce Corporation Tax in Northern Ireland. What is being considered is the devolution of Corporation Tax to the Northern Ireland Assembly. It would be for the Northern Ireland Assembly (Executive, in practice) to reduce Corporation Tax, not the UK Government.

This is important because, of course, that couldn’t possibly currently happen. For all their talk of lower business taxes (DUP) and all-island tax harmonisation (SF), the fact is the DUP and SF have brought the Executive to the brink of collapse over immediate spending reductions (necessitated by maintaining the current broken Welfare system) and ongoing real-terms spending reductions (necessitated by the UK Government’s determination to reduce the deficit). The idea that they would double this burden by adding hundreds of millions to the “savings” already having to be made to take a punt on the long-term benefits of a Corporation Tax reduction is laughable. Reduction of Corporation Tax, even if it were devolved, would merely go into the pot with all the other issues upon which the DUP and Sinn Féin are gridlocked – from the single education authority to the Maze.

A Corporation Tax reduction can’t and won’t happen any time soon. Don’t trust anyone telling you otherwise.

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3 thoughts on “NI Corporation Tax reduction can’t happen

  1. I’ve been saying this since I first did research into it in 1996.

  2. I note several Twitterati taking issue with the word “can’t”, which I am using in the context of what is currently politically possible.

    You’re actually going a step further and saying it can’t happen anyway. You may well be right.

  3. Well there’s always the Donegal, Louth, Monaghan, Cavan, Louth and Leitrim enterprise zones, and just using the lorries and vans to export stuff.

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