Letter to Finance Minister, Conor Murphy in response to the establishment of a Fiscal Commission in Northern Ireland
Dear Minister Murphy,
I hope this letter finds you well.
We refer to your announcement on 12 March 2021 establishing a Fiscal Commission to conduct an examination of the fiscal powers of the Northern Ireland Assembly. We understand that part of the Commission’s remit will also be to examine if a reduction in the rate of corporation tax in Northern Ireland can be implemented.
Chartered Accountants Ireland is a membership body with almost 29,000 members of which almost 5,000 are based in Northern Ireland. Two thirds of our Northern Ireland members are in business.
Prior to the Corporation Tax (Northern Ireland) Act 2015 receiving Royal Assent in 2015, Chartered Accountants Ireland work vigorously for several years on a public campaign to devolve corporation tax raising powers to the Northern Ireland Assembly.
This Institute met with ministers in Northern Ireland and further afield, provided evidence to various Assembly and UK Government Committees and contributed to calls for evidence and consultations on this issue.
Chartered Accountants Ireland is also uniquely positioned to draw on its experiences of how a tax system is administered in a small open economy such as Ireland.
As you will be aware, the Chancellor of the Exchequer announced in his most recent Budget that the UK rate of corporation tax will increase from 19 percent to 25 percent from 1 April 2023. This means that from that date many Northern Ireland companies will be paying double the 12.5 percent rate of corporation tax in Ireland.
A lower rate of corporation tax in Northern Ireland coupled with the dual benefit of having access to both the UK and the EU’s single market for goods would put Northern Ireland in a unique position to attract foreign direct investment into the region.
In the context of the foregoing, we are therefore writing to offer our expertise and guidance to the Fiscal Commission in the course of this very important work.
Please do not hesitate to contact me, Norah Collender, or Leontia Doran to discuss further.
I look forward to hearing from you.
Yours sincerely,
Dr Brian Keegan
Director of Advocacy and Voice
Chartered Accountants Ireland