DUBLIN: The DUP and Sinn Fein have agreed that the new rate for corporation tax in Northern Ireland should be 12.5%.
First Minister Peter Robinson unveiled the figure during his historic appearance at a business breakfast in west Belfast on Friday morning.
The two parties have made the deal to try and get the powers to set the tax rate pushed through by St Patrick’s Day when the First and Deputy First Ministers are flying to America to promote investment here.
“We need to have the dates and the rates to show the Americans, that is the most important thing,” one DUP source said.Just days ago the DUP had argued for a rate of 10% to undercut the Republic’s 12.5%.
In the UK the tax is charged at 21% but that may soon fall to 20%. Mr Robinson said 12.5% was emerging as the consensus.
Corporation tax is charged on business profits and the Republic’s low rate has been credited with attracting in blue-chip US companies like Amazon and Google.
Each percentage point cut will cost us about £40m a year from our block grant, though the final figure has yet to be disclosed.
The Executive parties believe the investment is vital to revitalise the economy. The London Government has agreed to pass the legislation in April before the election, allowing the powers to actually go live in about two years.
In the meantime the Executive and Invest Northern Ireland intend pitching the new rates to potential US investors to tempt them in.
Mr Robinson described yesterday’s event, which was chaired by West Belfast Sinn Fein MP Paul Maskey, as “an historic first”.
