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UK Government confirms offer to Northern Ireland to set own corporation tax rate Back
Chancellor George Osborne in his Autumn Statement confirmed the intention of the UK Government to devolve the option to set corporation tax rate to the Northern Ireland Executive. The move signals an option for the NI Government to attract FDI and corporate investment by matching the 12.5 p.c. tax rate in the Republic of Ireland.
The statement by the Chancellor is set out here . The move signals an option for the NI Government to attract FDI and corporate investment by matching the 12.5 p.c. tax rate in the Republic of Ireland.
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First Minister Peter Robinson speaking on 20th November at the announcement of the creation of 600 new jobs by Citi at its Titanic Quarter Belfast centre, which is scheduled to grow to employ a staff of 2,100.

Opinion has not been unanimous in Northern Ireland on the advisability of the move. It has been favoured by leading politicians, tax advisers, such as KPMG's Eamonn Donaghy, for a number of years, and by public figures such as the late Sir George Quigley a legendary public servant in Northern Ireland. It has also been supported by key politicians, including SDLP MLAs, and crucially, leading members of the DUP, including former finance minister Sammy Wilson, and the first minister Peter Robinson.

It was also supported by NI Secretary of State Theresa Villiers' predecessor, Owen Paterson, during his tenure in Northern Ireland.

With a UK general election due to be held in 2015, the timing of the concession is critical, as it represents the last certain opportunity that existed for a UK Conservative Government to make the move for Northern Ireland. With current UK polls pointing to a similar electoral outcome at the next election to the last, the incumbent administration is keen to court the smaller parties in parliament, which would likely include the DUP as the largest NI party, and the corporation tax concession is a way for the Tories to potentially secure DUP support in the event of another UK minority Government after the election.

The issue of low corporation tax is political and has been opposed by campaigners, such as the Tax Justice Network. The advisability of the move was also questioned by the CEO of one of Northern Ireland's leading international financial services employers, AllState, Bro McFerran, in the past week. The likelihood of a Labour administration introducing the option would be less, but once implemented in NI, there would be a difficult choice for a future UK Government of whatever hue to take to reverse the legislation.
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