Tuesday, 2 July 2013

Questions (134)

Joe McHugh


134. Deputy Joe McHugh asked the Minister for Finance if he will give an update on his response to the proposed reduction to 12.5% of Northern Ireland's corporation tax rate; and if he will make a statement on the matter. [24138/13]

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Written answers (Question to Finance)

As a rule we do not comment on the tax regimes of other jurisdictions. However, the OECD has consistently stated that low corporation tax rates combined with a broad base is the best way to encourage economic growth while still maintaining tax revenues. That is what we have being doing for many years and what we will continue to do. A reform of the Northern Ireland corporation tax rate and base has the potential to generate benefits in that part of the island, as well as on this side of the Border. Some commentators might see it as a case of Northern Ireland entering into direct competition with us on corporation tax, but I do not see it that way – I see it as having the potential to benefit both sides of the Border thereby providing an impetus for the island as a whole.

Of course there is strong evidence that a low corporation tax rate on its own will not be enough to attract significant FDI and we have consistently demonstrated that Ireland’s attractiveness for foreign multinational corporations is based on a whole range of factors – one of which happens to be our 12.5% tax rate.