Sinn Fein backs a single corporation tax of 12.5% for small businesses on both sides of the border
Sinn Féin supports a single corporate tax rate of 12.5% for small businesses on both sides of the Irish border, its finance spokesman has said.
However, Pearse Doherty said it would be “impossible to do” due to UK government rules.
Two years ago, Sinn Fein dropped the pursuit of lower corporate tax rates for Northern Ireland because it would lead to cuts to the Westminster Block Grant, hitting public services.
At an event organized by the Institute of International and European Affairs (IIEA) yesterday, Mr Doherty spoke of Dublin’s change in direction on corporate tax policy, which will see the Republic agree to join the framework from the OECD for a headline tax rate of 15%, giving up its popular previous rate of 12.5%.
But he said he wanted “a single rate of 12.5% across the whole island of Ireland”.
The UK Parliament approved Northern Ireland’s power to set its own corporate tax rate in 2015, but the legislation has never been used and is dependent on Northern Ireland’s financial ‘viability’.
Mr Doherty also called for a “new industrial strategy”, which he said must be “regional as well as national, harnessing and building the capacity of our higher and further education institutions across the country, north and south”. South”.
“A successful Derry means there is a successful Donegal and vice versa, and we have to take that into account,” he told the audience.
Mr Doherty appeared to acknowledge that the long-running backlash between the Northern Ireland executive and the UK government over the issue of the region’s corporate tax rate was unlikely to be resolved anytime soon.
Asked if aligning corporate tax rates on both sides of the border would be a priority after the upcoming Assembly elections, Mr Doherty said his party was still in favor of the move but that it currently seemed “impossible”.
“Sinn Fein favors the rate of 12.5% on the whole of the island of Ireland. The problem, in terms of being able to do this, is that in negotiations with the UK government, any benefit from the corporate tax cut will go to the UK exchequer, as opposed to the executive branch of North Ireland.
“And also, the cost of doing it initially, because you would lose tax revenue, would also have to be borne by the executive, which means the costs have to be found in cuts to health care or to health care spending. capital or in other areas. .
“It makes it impossible to do it. But yes, where we want to be is to have a single rate of 12.5% across the whole island of Ireland.
“That’s one of the problems when part of your island is under British rule. And we don’t have those levers.
In January 2020, Stormont Finance Minister Conor Murphy said the executive was “not actively seeking” a lower corporate tax rate for Northern Ireland from the UK government. The UK rate is 19%.
He told BBC NI that Sinn Féin had always insisted there had to be ‘a very honest assessment of what a cut would cost’ as any subsequent ‘hit’ to the executive’s finances would affect services public. He said Stormont was “just struggling to provide basic public services”.
“That’s not to say others may not bring it up again, but it’s not something I’m actively pursuing,” he said at the time.
Sinn Fein had previously been criticized by smaller left-wing parties for its support for the corporate tax cut. However, sections of the business community said they were disappointed when Sinn Fein dropped its support for lowering the tax rate.