In its response to the local Department of Finance “Consultation on devolution of more fiscal powers”, the Institute does not recommend that the Northern Ireland (“NI”) Executive, if re-established, consider any other taxes for devolution at the present time. The ongoing political instability in NI is a strong argument against further devolution of taxes. Once re-established, the NI Executive should instead pursue the completion of corporation tax devolution.
In doing so, it should begin by following the pre-requisite steps set out in the Independent Fiscal Commission’s interim report. A public consultation should be launched to explore potential mechanisms to mitigate the impact of the cost of NI corporation tax via the block grant reduction.
Any new NI Executive should also work with the Office of National Statistics, HM Revenue and Customs and the Northern Ireland Statistics and Research Agency to improve data on tax receipts in NI.
The Institute also took the opportunity to urge all political parties to consider the impact that lack of government in the region is having on public services, businesses and, ultimately, on citizens. It is hope that, through good faith discussions, a mutually agreed solution on the Protocol can be reached as soon as possible which protects peace and jobs, provides prosperity for all and enables the Executive to be re-established.
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