Saturday 21 September 2019

Colm Kelpie: We're not competing on corporation tax alone

Stock image
Stock image

Colm Kelpie

The prospect of a cut in Northern Ireland's rate of corporation tax to 12.5pc, to bring it in line with the Republic, doesn't just level the playing field.

Publicly, both politicians and business leaders claim they see it as an opportunity to develop the all-island economy.

Improving enterprise North and South benefits the island as a whole, or so the argument goes.

But you can only be magnanimous about these matters if you believe you're competing on a like-for-like basis. Some business chiefs on this side of the Border have been increasingly flagging that Ireland is uncompetitive. And they argue it's not just about the corporation tax rate.

Labour costs and living costs are both much lower north of the Border - while the shortage of housing has hampered some multinationals looking to bring staff to Dublin.

In July, Dublin Chamber of Commerce said it had noted an increase in the number of businesses seeking to relocate away from Ireland to Britain.

It also warned that the UK has achieved a number of competitive advantages within the last five years that pose a threat. The chamber said the tax regime for entrepreneurs in the UK was better.

Business leaders believe the challenge for the Government here is to ensure that the Republic is not disadvantaged vis-a-vis the North in categories such as income tax and capital gains tax, which, while improved in the Budget, remains out of kilter with the UK offering.

Irish Independent

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