Posted on Thursday 8 January 2015 by Ulster Business
Theresa Villiers making the announcement at Camlin Group
Legislation has been set out to allow corporation tax-setting powers to be devolved to Stormont by Secretary of State Theresa Villiers.
Speaking to business leaders at an event in Lisburn at Camlin Group, she said it was hoped the bill would be passed before Parliament ahead of the general election in May and expected the powers to be passed over to Stormont by 2017.
The announcement marks a significant milestone in a long-running campaign by business leaders and politicians, one which is based on the large discount charged on company profits in the Republic compared to those in the UK.
The Dublin government levies a 12.5% tax on big company profits compared to the current 21% rate in the UK and it has been argued that companies based in Northern Ireland are at a significant disadvantage to their counterparts across the border.
In addition, the higher corporation tax rate north of the border is thought to dissuade inward investment from overseas companies wanting to set up profit centres here.
But while the latest move by the Secretary of State has been lauded, there are still obstacles in the way to the devolvement of tax-setting powers, not least some opposition to the move from Labour which Ms Villiers alluded to in Lisburn.
Nevertheless, the Chancellor George Osborne said he backs the move.
“This will give the Northern Ireland Executive greater power to rebalance the economy towards a stronger private sector, boosting employment and growth,” he said. We want to work with the NI Executive to ensure that Northern Ireland will attract investment and become more competitive, boosting the entire UK economy.