TAXING REALITY....
Friday, December 22, 2006 at 07:58AM Did you see that Treasury minister Dawn Primarolo has poured cold water on calls for her boss Gordon Brown to create a low tax base in the province to attract industry and jobs? In a hugely negative assessment she said reducing corporation tax would place a "significant administrative burden" on both the government and businesses.
The Industrial Task Force, a group of senior Ulster business leaders, has for the past year argued the 30% corporation tax rate in the province should be reduced to 12.5% - the level at which the levy is set in the Republic - to boost the economy. (I favour a 10% rate myself, let's CHALLENGE the Republic and watch the corporate exodus Northwards!)
Primrolo adds that "Following a ruling by the European Court of Justice in September 2006, it is also clear that introducing lower regional rates for corporation tax in the UK would violate EU law."
Nice to have an admission from this lousy government that UK membership of the EU prevents us from doing that which may be right for our regions. The lower corporation tax idea gets my vote but it has NO CHANCE of being championed by the goons in power.
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Reader Comments (11)
Now you're talking. I think the northern economy should be given every possible advantage in its attempts to catch up. If Gordon Brown was as smart as he is supposed to be he would see that the north would end up contributiong more to the coffers in a few years.
With my commercial head on I can fully understand and support the push for low corporation tax. I can see all kinds of benefits for all of the peopl of NI. I also can see that it will not happen while Brown the clown is around.
The Republic has lower taxes but also lower social provision - only welfare dependants, the low paid and those over 70 yrs recieve free healthcare, everyone else must pay - it costs me 40 euros to see the
Doctor now - it was free when I lived at home.
What your proposing David is that NI maintains its higher social provision but also gets the lower tax rates.
This would be totally having th best of both worlds.
Would you be prepared to accept a cut in Britain's subsidy for NI in return for a lower tax rate?
You argue that NI is an integral part of the UK - so surely the tax rates should also be the same.
You cannot have it both ways. Lower tax with lower spending or higher tax with higher spending.
Which is it to be?
It was never going to happen, just too complicated and politically impossible in the context of the Union. Gordon Brown doesn’t have the money to play with and a scenario whereby Scottish businesses up sticks and relocate across the North Channel to get a lower tax rate will not go down well for him at home.
By and large when all the different taxes are counted up NI and the south come out much of a muchness (eg there is much higher VAT on fuel and energy in the Republic)
By getting down on their knees, pushing out the begging bowl and whining for special treatment in NI, instead of campaigning for a low tax regime across the entire UK and earning respect of their peers,the Unionist parties have directly attacked the Union but are too stupid to see what they have been led into.
The English now want rid of the Scots because the Scots are taking what the English perceive as an unfair slice of the Union’s finances. Campaigning for lower taxes here, but not in England, Scotland and Wales will not endear us to the rest of the Union.
I totally disapprove of high spending. I would happily reduce the public sector - shred it.
A combination of things allowed to ROI to benefit in the way it did.
- A young educated workforce
- Good English speakers
- A government willing to bend over backwards to facilitate investment.
- Government and social stability
- A proactive IDA looking for a particular type of investors.
- Other smaller tax incentives along with corp tax.
It could be argued that the ROI was lucky in its timings. A lot of the newer EU states are now trying to copy the ROI, with as yet, no particular success. But the ROI is looking forward at this stage, they are prepared for the fact that a lot of the low end jobs will be lost to other EU states, such as call centres, and manufacturing, so the ROI is preparing for this by encouraging local entrepreneurship and by attempting to attract high end jobs
David, I find it very strange that you would look for a lower corp tax for NI. Surely you can see the ammunition you would be giving to Welch and Scottish nationalists. Why does NI stick out for special treatment.
Where NI will suffer, is in its distance from where decisions are made. Even with a devolved government, the serious decisions on incentives for industry will always be made in London as decisions like this may require change to tax law, and other London controlled decisions. For instance, a cut in corp tax with have to be matched with a cut in capital gains tax.
Fair enough David.
Personally, I hope NI is given a lower corporation tax rate - this will be win win from a Nationalist viewpoint - the NI economy improves and more jobs created - a positiive thing.
The Union would be definately affected though. Scots Nationalism, already growing, would gain even further ground arguing that only independance could allow them set their own rates. And the sleeping monster that is English nationalism would also be roused.
Honestly, The English, as a Nation, recieve the lowest proportion of British govt spending per person yet are the most productive.
Eventually, more English people will see that by going it alone they would be rid of Labout for once and for all (England being Tory by instinct)
But they would also have the ability to lower english taxes and increase spending.
So if NI is given special treatment - the union will come into sharp focus imho. It would create tensions that would build up and eventually explode.
All positives from my viewpoint.
On the other hand - if NI is forced to continue with 30% corporation tax - the argument for creating an all Ireland economy increase. As the demographics move close together, the deciding factor in future will be middle class Protestants. Many business owners would perhaps like to be paying only 12.5%. This will all lead to a more pragmatic and less emotional approach to the issue of NI's relationship with the booming Republic to the south.
It's all good.
...and add to that a competent, outward and forward looking, business orientated political class, not one dependent on and bloated incompetent civil service for their votes.
Any business investor worth his salt would look at the purile marxist dribblings that spew from all parties here and start calling estate agents in Kildare and Krakow.