The Institute's Director of Taxation, Mr Brian Keegan suggested to the annual conference of the Irish Association in Newry last month that the time may have come to take the first steps in devolving the power to set a separate corporation tax rate for Northern Ireland.

Mr Keegan pointed out that as an all island organisation, Chartered Accountants Ireland had first hand experience of the benefits of a low rate of Corporation Tax in attracting Foreign Direct Investment, and the employment that it generates. He also told the gathering of politicians, business people and members of the Irish Association that businesses see tax primarily as a cost to be managed. He said “A low rate of corporation tax attracts business to locate in the same manner as low labour or energy or distribution costs.”

The point was made that a low tax rate regime is not the same as a low tax regime, and that low rates can in fact make the tax system more efficient. The Institute acknowledges that there are political and social challenges associated with introducing a separate corporation tax rate for Northern Ireland but the benefits are greater economic activity and more jobs within the economy.

The Institute's Council has supported the introduction of a 12.5% rate of Corporation Tax for Northern Ireland for a considerable time. The Institute's Ulster Society has put forward a position paper on the matter, which may be found at http://ulster.charteredaccountants.ie. It states that Chartered Accountants Ulster Society is supportive of the proposal for a devolution of the power to vary (reduce) the Corporate Tax rate in Northern Ireland and calls for further research and debate as regards the merits and timing of such a reduction.