At a presentation of evidence to the Northern Ireland Assembly's Finance and Personal Committee on 5 March, ICAI called on the Committee to continue to pressurise the British Government to grant Northern Ireland a reduced rate of corporation tax. In addition, it was suggested that the UK Government could consider an interim short term measure in advance of the May investment conference.

The following is the ICAI press release:

“Giving evidence to the Committee this morning the President of ICAI, Vincent Sheridan, said it was low corporate tax rates that provided the vital stimulus for foreign direct investment in the Republic of Ireland over the past decade and that foreign direct investment will be key in Northern Ireland if the economy is to grow and reduce it's dependency on Great Britain.

Addressing the Committee, Mr Sheridan said:

“ICAI contend that there are no significant legal or fiscal impediments to the introduction of a 12.5% rate and that the British Government should move now to provide Northern Ireland with the means to grow its own economy.

Sir David's analysis is that corporation tax was not the key driver of economic development in the south. The problem for the debate is that next to nobody shares that view. Our support for the introduction of a reduced corporation tax rate in Northern Ireland stems from our first-hand experience of its effect in the Irish economy”.

Eamonn Donaghy, Chairperson of the ICAI's Northern Tax Committee, called on Sir David not to make the same mistake twice when he reports for a second time next month.

“As Sir David prepares for his second report we would suggest he take a closer look at the evidence in front of him. The US investment conference in May is a one off opportunity for Northern Ireland to attract significant investment and build on the considerable goodwill which already exists in the US. But let us not confuse goodwill with business decisions. If real progress is to be made, something more has to be on offer at this conference. Something has to distinguish Northern Ireland between all other regions as the destination for FDI. We hope this will be a reduced rate of corporation tax – this is the medium term issue that really matters” Mr Donaghy said.

Brian Keegan, Director of Tax for the ICAI said the Government could consider an interim short term measure in advance of the May conference which would indicate their willingness to offer fiscal incentives to potential investors.

“If a reduced rate of Corporation Tax is indeed a medium term issue, something else is required in the short term. This could take the form of enhanced R&D credits. An indication from Sir David or the Chancellor that this kind of new fiscal incentives are on the table will undoubtedly assist the work of the Conference and ICAI would be supportive of it” according to Mr Keegan.”

In addition, ICAI has submitted further evidence to Varney II, the second review of Sir David, this time dealing with the Competitiveness of Northern Ireland.

The Response by the Institute of Chartered Accountants in Ireland to the Call for Evidence of 28 January 2008 to Sir David Varney's Review of Competitiveness of Northern Ireland is reproduced at Section 2.01.