Corporation tax rate to fall to 12.5 per cent from 2018
NORTHERN Ireland's rate of corporation tax is to be lowered to 12.5 per cent from April 2018 as part of the new political deal struck by the Stormont parties.
It is already the most successful region in the UK for inward investment, on a per capita basis, and the reduced rate - equal to that in the Republic - is seen as making Northern Ireland more attractive as an investment location for existing and potential new investors.
According to Invest NI: "It will open doors for us to be able to compete for, and seek to attract, new operations, which are tax sensitive".
Its chief executive Alastair Hamilton said: “Securing inward investment projects often takes two to three years from initial engagement to confirmed letters of offer.
"Now that we have an agreed rate and date will be able to proactively begin engaging with potential new investors who may have profit centre opportunities. This announcement will also provide a welcome boost to local, profitable businesses which will have additional finance to invest in their future growth.”
CBI Northern Ireland chairman Colin Walsh said the wider business community welcomed the announcement of a new comprehensive political deal that promises to resolve the long standing political instability that has had a detrimental impact on our economic recovery.
"The recent spate of job losses at the likes of Michelin has demonstrated that the economy, now more than ever, needs political stability with a clear vision, leadership and commitment across the executive,” he said.
“Reducing corporation tax will undoubtedly provide a key ingredient to energise the private sector as well as attracting a new generation of inward investment businesses thereby creating tens of thousands of new jobs and boost prosperity for all, and transform our economic prospects."
Eamonn Donaghy, chair of Grow NI, the umbrella group representing business, academic and voluntary organisations committed to the devolution of corporation tax, believes the 12.5 per cent rate can help create "tens of thousands" of jobs in local, national and international companies across cities, towns and rural areas throughout the north.
The political deal also set out commitments to proceed with the construction of key transport road projects, including the completion of the A5 by 2019, with the financial support of the Dublin government.
There is also a commitment of an additional £500m from the British government over the next five years for infrastructure projects.