Last Monday the Institute met with representatives from the Northern Ireland Chamber of Commerce and the Confederation of British Industry Northern Ireland (NI) to discuss potential ways forward in our ongoing campaign to reduce the corporation tax rate in NI.
The meeting was very informative and productive with each of the organisations agreeing that NI needs a coherent, long term industrial policy that attracts investment, creates secure, well paid jobs, and fosters innovation. There was also agreement on the end goal of reducing the corporation tax rate in NI.
The key issues and Institute stance
Research by the ESRI in 2021 'Enhancing Attractiveness of the Island of Ireland to High-Value Foreign Direct Investment' states that a reduction in the rate of corporate tax to 15 percent would yield an annual increase of 7.5 percent in high-value foreign direct investment in NI. The need for an up to date economic assessment of the impact of reducing the corporate tax rate on employment, earnings, and investment is therefore viewed as an important step in the current campaign.
One of the main issues remains the potential impact on the block grant that NI receives every year. The Institute outlined various measures that could be availed of to overcome this issue, most notably the use of a low interest loan from Westminster to manage the initial drop in corporate tax revenue that would arise immediately after the rate reduction.
Our progress to date and next steps
The meeting was an important step in achieving a united approach across the business community in NI. Work will continue to garner cross-party consensus on reducing the corporate tax rate in NI which will be critical when the campaign is taken to Westminster. This point was highlighted during the Institute's recent appearance before the joint Economy and Finance Committees in Stormont last month.
As outlined previously, in November 2025, the Institute wrote specifically to the Exchequer Secretary to the Treasury on this issue. In the letter, we highlighted that the ultimate aim of a lower rate is for it to become self-funding in the longer term, but that it would necessitate a replacement loan at a low interest rate from HM Treasury to fund the necessary block grant reduction.
Last year the Institute published its position paper ‘Enhancing Our Competitiveness: The case for a reduced rate of corporation tax in Northern Ireland’ which launched its refreshed campaign for a lower rate.
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