THERE’S been much talk about taxes this week that is just about to pass into last week. Much talk has been over the tax implications of the bail-out of the Republic of Ireland and the tax and cut budget.
Equally, Norn Iron has had tax on its political mind. First Minister Peter Robinson has said that he eagerly awaits the HM Treasury paper on rebalancing the local economy as he urged a reduction in corporation tax “up here”.
Before the mirth, here are the facts, as we selectively choose them much in the way that a management consultant may, or may not select such facts to suit their client’s needs.
First off, the rate of corporation tax in the UK (which, despite protestations from some, Norn Iron is currently part of) is set at 28%. Second, the rate of corporation tax in the Republic of Ireland is 12.5%. Thirdly, large companies, and even small ones employ accountants. Figure the relationship out for yourself.
The next fact is that Foreign Direct Investment – that Golden Goose Government so eagerly prostrates itself before – is dependent on more than the tax regime. After all it is also down to what Invest Norn Iron can con, sorry can do, to convince investors to make their way to our fair shores, laden with promises of jobs and hands out for handouts.
So why all the fuss about Corporation Tax? Said allegedly high UK rate has not as yet deterred the financial world building modern towers of Babel in London. If you were to believe bankers, it is only the threat of curbing bonuses that may threaten London’s pre-eminence in financial shenanigans.
We think there is a wee sneaky voice in most politicians advocating lower corporation tax in Norn Iron that occasionally whispers in the darkened night, when conscience creeps towards realisation that the wee voice is uttering just two words: “gesture politics”.