Inside the world of business
Headaches already for shift in Northern corporate tax rate
THE BRITISH government is due to publish a consultation paper today on mechanisms that would allow for the devolution to the Northern Ireland Executive of the power to set corporate tax rates.
It represents a significant breakthrough for the various interest groups that have been calling for some sort of measure to combat the difference between the UK rate and the rate in the Republic.
However, in the finest traditions of the Northern parsimony, the Northern Ireland branch of the Chartered Institute of Taxation (CIT) has already sounded a warning that it could all backfire. This is because the UK government has made it clear that any reduction in the corporate tax in Northern Ireland must be made up by tax increases elsewhere in the North.
It is hoped the additional income tax, national, insurance, rates and VAT generated by companies flocking to the North to avail of its lower tax rate would close the gap, but there is of course no guarantee warns the CIT.
When you take into account the administrative headaches that will be created for companies operating throughout the UK and not just the North you begin to question whether or not the idea is worth the candle, particularly given that Invest Northern Ireland seems to be doing an effective job of attracting inward investment using the traditional incentive of up front grants.
From this perspective, it starts to look as though the only guaranteed winners will be existing businesses focused solely on the Northern market, a situation which would leave the Northern Ireland executive right back where it started.
Devil in the detail of the hidden money trail
WHERE DOES all the money go?
An Amnesty International symposium on economics and human rights - and the overlap that could and should exist between the two - was held in Dublin yesterday to highlight the fact that nobody really knows.
A survey carried out for Amnesty late last year by Millward Brown Lansdowne found that 81 per cent of people did not understand how the Government makes decisions about how money is spent. The same percentage did not believe there were effective mechanisms to track where the money goes.
The evidence suggests they are right.
In their presentation, William Batt, a director of consultancy firm Indecon, and Amnesty International Ireland's mental health campaign co-ordinator Karol Balfe pointed to a 2009 Indecon report that showed the Health Service Executive (HSE) could not explain how its mental health budget was spent.
Progress, or lack thereof, in implementing policy in this area was impossible to monitor, to the detriment of human rights.
Another example came courtesy of Dr Micheál Collins, the Trinity College economics lecturer who chaired the Commission on Taxation's subgroup on tax breaks - or tax foregone.
Out of 131 tax breaks which existed at the time, it could only get cost information on 89 and in many cases the data was "not robust".
ESRI director Frances Ruane summed it up: "The devil is in the detail and it does matter."
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