Belfast Telegraph article 14 June: "First impact of cut will be to boost our morale"

Contributing to the Belfast Telegraph's week long review of Corporation Tax, BDM Tax Director, Brendan Morris writes:-

"Reducing the rate of corporation tax (CT) paid by companies in Northern Ireland is likely to have a ‘slow burn’ impact on the local economy. Clearly, the plan would be that the lower rate would tempt more business to Northern Ireland. That in turn would generate more employment with associated taxes, which would hopefully more than refill any depletion of coffers from the CT cut.

However, the immediate impact would be less tangible – but more important. That immediate impact would be a morale boost for the economy, thanks to a perceived vote of confidence in its prospects. This would be the case even if a phased and/or delayed rate cut was announced. After all, the underlying message of a CT cut would be not simply ‘cheap taxes here’ – otherwise all business would migrate to some of the classic tax havens. Rather it would be: ‘we have prospects and are confident enough in our offering to make sure you take note of us’.

Of course economic competitiveness is not just about tax levels. When the CIOT surveyed our local members last year, most (70%) agreed that a cut in CT rates was the simplest and quickest way of making our region more competitive. But over a third thought that non-tax measures were even more important. Better infrastructure, including IT, and a stable NI executive were top of the non-tax list.

But none of these changes would grab the attention of the international business community in the way that a substantial CT cut would."