Northern Ireland May Seek Tax Raising Powers

by Amanda Banks, Tax-News.com, London

11 March 2002

Northern Ireland Finance Minister Sean Farren has called for the province to be granted similar income tax raising powers to those achieved by Scotland following devolution.

Speaking to Public Finance magazine, Mr Farren explained that Northern Ireland needs to raise an additional £4 billion for the modernisation of services over the next four years, and said of the tax raising arrangement: 'I think we should have it, potentially, though I don't know whether we would use it.'

However, he expressed fears that any income tax raising powers could be granted at the expense of additional funding from the Treasury, which would effectively defeat the object of the proposed move.

'The systems of devolution adopted in the UK are not systems that provide a great deal of fiscal autonomy,' he explained. 'Northern Ireland may not be a region with the potential for a great deal more, because the Treasury could say "If you are raising more money yourselves, why do you need more money from us?".'

The Finance Minister also revealed that the Northern Ireland Executive may ask for a relaxation of Whitehall's spending controls, which would allow the region to increase expenditure via its own borrowing.

http://www.cipfa.org.uk/publicfinance/news_details.ihtml?news_id=12217

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