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An all island corporation tax rate? March 23, 2015

Posted by WorldbyStorm in Economy, Irish Politics, Northern Ireland.

Seems to be in the offing according to a report in the SBP this weekend. The politics of this are particularly intriguing. According to the report:

The Democratic Unionist Party (DUP) will drop its plan to put through an ultra low corporation tax rate of 10 per cent in the six counties after Sinn Féin faced down the scheme in recent weeks.
DUP leader Peter Robinson is understood to have told a breakfast meeting of business leaders in Belfast organised by Stormont MLA Gavin Robinson that the assembly will likely pursue a rate of 12.5 per cent.

And why would that be, why would the DUP ‘drop’ its plan?

The 12.5 per cent rate is understood to be favoured by Sinn Féin, which wants a common corporate tax base across the entire island.

And apparently:

A DUP source admitted that the party was now likely to back away from the 10 per cent rate after strident opposition from Sinn Féin. “Our starting point was 10 (per cent), but if it was a choice between staying where we are and going to 12.5 per cent, it wasn’t much of a contest,” one source familiar with the negotiations said.

Hmmmm… perhaps this is what is meant by economic issues taking over from identity issues in Stormont? Or perhaps not! And clearly SF has an eye to matters beyond the North…

Focus will now shift towards negotiating a final agreement on the 12.5 per cent rate, although DUP sources said that further opposition could not be ruled out from Sinn Féin, which will be conscious of the risk of being accused of hypocrisy by its political opponents in the Republic.
Sinn Féin has been a vocal critic of what it says are low rates of tax on corporations and high net worth individuals in the Republic.

Again, it seems to me, this is another example of the problems of having to contest politically in two polities. It’s not just that opponents will pile in to point up discrepancies and contradiction, but that those discrepancies and contradictions function from the off. Granted the forced coalition aspect of the status quo in Northern Ireland adds a further twist to matters. How these circles can be squared is hard to see. Perhaps a sort of intrinsic partitionism, for which read absolute indifference to matters NI, will prevail amongst the electorate in the RoI. Or perhaps not. Or perhaps an attitude of this is how the dispensation works is baked in from the off.


1. Gewerkschaftler - March 23, 2015

Absolute madness.

How much income are they giving up – how many hundred million pounds?

All for the sake of neoliberal dogma.

Are they intending to compete with Southern Ireland in the corporate tax avoidance scandal? Which in terms of an all-Ireland perspective is at best a zero-sum game. How can Sinn Fein justify this?


CL - March 23, 2015

Ireland,-all Ireland- is being economically unified; N.I. cannot be less attractive to capital than ROI,-or vice versa.


Gewerkschaftler - March 23, 2015

But it won’t be even particularly attractive to capital. NI is not in the Eurozone and there’s plenty of other ways of avoiding corporate tax in UK.

And it will lead to further cuts leading to further lack of demand in the NI/Ireland domestic economy.

Absolute brain-dead dogma, as I said.


gendjinn - March 23, 2015

Unless SF are knowingly crashing the NI economy. That or they are clueless on the economic impact. Either way I’m disappointed in them.


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