In its response to the request for feedback on the Independent Fiscal Commission NI’s interim report published in December 2021, Chartered Accountants Ireland is in agreement with the Commission that the NI Executive should pursue corporation tax devolution. Despite the current political situation in NI, the Institute intends to continue with its campaign for a lower corporation tax rate for the region and in the coming weeks is due to meet with the Financial Secretary to the Treasury to discuss the issue and seek HM Treasury’s current views on any obstacles to doing so.
The Institute’s campaign to switch on the NI Executive’s corporation tax raising powers continues to be supported by members with two in every three in favour of a lower corporation tax rate for the region.
The Institute’s response to the Fiscal Commission’s interim report highlights the clear economic benefits of a lower corporation tax rate for the region and agrees that there are risks and complexities which require consideration. However these are not new and there are potential mitigations which could be considered including the possible exclusion of service company corporation tax revenue from the block grant reduction as a result of the UK’s departure from the EU.
It would have been helpful if the Fiscal Commission had taken the opportunity in its interim report to make some reference to the various potential mitigations which could be considered in the context of these well-known risks and complexities including those already available within both the Corporation Tax (Northern Ireland) Act 2015 and more generally within UK tax legislation from an avoidance perspective.
The submission made also refers to the Commission’s plans to examine options for income tax devolution in its final report and the possibility of devolving excise duties to the NI Executive.
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