Northern Ireland to Set Own Tax Rates in 2013?
October 19, 2012 Taxation in UK
LONDON – By the end of the year Northern Ireland could be granted the power to set its own corporate taxes and match its rates to those in the Republic of Ireland.
On October 18th a ministerial working group comprised of representatives of the UK Treasury, the Northern Ireland Office and the Northern Ireland Executive announced that an options paper will soon be presented to the Prime Minister of the UK David Cameron on the issue of devolving Northern Ireland’s powers to set its own corporate income tax rate.
The Group will create a final report regarding the issue of devolution over the next few weeks, and will present their findings to the Prime Minister, who will make the final decision regarding the topic based on the Group’s findings.
The report will also contain an estimate of the potential costs for the process of devolving the tax setting powers, as the UK Treasury currently claims that the task would cost GBP 700 million while the Northern Ireland government insists that it will only be GBP 200 million.
Some political analysts have already estimated that a decision could be made by the Prime Minister by the end of the year.
Supporters of the devolution claim that the move will allow Northern Ireland to lower its corporate tax rate to match the Republic of Ireland, allowing the economy of Northern Ireland to expand with an influx of foreign investment and growth in the job market.
The decision regarding Northern Ireland’s tax rates could also have wider reaching implications for the UK, as a move to devolve the tax setting powers could spark a call for a similar decion to be made for Scotland.
br>Photo by aurélien.