ICAI Presents Evidence On Varney Report To Assembly Committee

by Carla Johnson, Investors Offshore.com, London

05 March 2008

The Institute of Chartered Accountants in Ireland (ICAI) has called on the Northern Ireland Assembly’s Finance and Personnel Committee to continue to pressurise the British Government to grant Northern Ireland a reduced rate of corporation tax.

Giving evidence to the Committee this week, the President of ICAI, Vincent Sheridan, observed that 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 its dependence on Great Britain.

Addressing the Committee, Mr Sheridan stated that:

“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 (Sir David Varney) 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 Varney 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 argued.

Brian Keegan, Director of Tax for the ICAI further suggested that 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.

Recommended