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ICAI Calls For Unified Irish Corporate Tax

by Jason Gorringe,, London

22 May 2007

The Institute of Chartered Accountants in Ireland (ICAI), has said that a reduction of Northern Ireland’s Corporation Tax rate to 12.5% to match the Republic of Ireland would benefit business in both jurisdictions.

The ICAI’s call came in advance of its Annual Conference in Belfast on May 17-18, which was attended by 500 delegates.

Speaking at the official opening of the ICAI’s new offices in Belfast city centre, performed by First Minister of Northern Ireland Dr. Ian Paisley, the ICAI’s Vice-President Jim Aiken said:

“The Institute of Chartered Accountants in Ireland calls for the introduction of a corporation tax rate in the North which will equal the prevailing rate in the South. It is often overlooked that the 12.5% rate in the Republic is focused on trade, and trade only – other company activities attract rates equivalent to the European average. A unified front on the taxation of trading activities on the island of Ireland will attract investment from abroad, and support all island markets to the direct benefit of both economies. We also believe that a corporation tax rate in the North which is in line with the South will encourage investment from South to North as well as from North to South."

“Such a move is not tax competition, it is a kind of tax facilitation – removing tax barriers. In any competition, there are winners and losers. Reducing the Corporation Tax rate in the North to bring it in line with the South will only create winners.”

Mr Aiken continued:

“To be truly successful in the international market, this island economy must display a united front to the world. By acting as closely as we can, both territories will surely benefit. Inward investment is important not just for the jobs it creates, but for the domestic markets it sustains. Growing prosperity north of the border generates growing prosperity south of the border, and vice versa if the conditions are right. We are making the conditions right by facilitating the ready movement of goods cross border, and our shared EU Membership has been integral to this. We must now take the next steps ourselves towards facilitating the ready movement of labour and services."

“We must recognise and credit the taxes paid by our workers and our businesses as they operate cross border. We must ensure that it becomes as easy for the Newry business to meet its tax obligations when it trades in New Ross, as it is for the New Ross business to operate in Newry. I can assure you that Chartered Accountants know better than most the practical barriers which prevent this from happening at present. We welcome and encourage the recent and ongoing initiatives by both Governments to simplify tax administration for cross border trade.”

Mr Aiken also highlighted the importance of the new offices for the ICAI and for its district Society in Northern Ireland, the Ulster Society of Chartered Accountants:

“We are particularly honoured here this evening to have with us the newly elected First Minister, Dr Paisley, to officially open these premises. These facilities will, for the first time ever, allow us to educate our students ‘in-house’. With the implementation of our new syllabus beginning next year, the education of Chartered Accountants will be entering a new era."

“It is fortunate and perhaps not entirely coincidental that ICAI has been in a position to make these bold steps at a time when stability and optimism is returning to Northern Ireland. The Ulster Society of Chartered Accountants has consistently argued that the restoration of devolved Government is a critical step towards the development of the Northern Ireland economy."

“As Chartered Accountants we have been central to the development of business life on this island since our establishment in 1888. We are rightly proud that notwithstanding any political turmoil, and there have period of considerable difficulty since 1888, that we have stood together as a body being represented and led by members of both traditions.”

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