Tax Reform Review should open debate on full fiscal flexibility
Sinn Féin economic spokesperson, Mitchel McLaughlin MLA commenting on the Tax Reform Review carried out by the Economic Research Institute has said that the debate needs to be opened up on full fiscal flexibility for a future Executive rather than just limited to a narrow focus on the issue of corporation tax.
Mr McLaughlin said:
"Sinn Féin have consistently argued for the harmonisation of tax regimes across the island of Ireland. Indeed we put forward a case for a single all-Ireland corporation tax rate.
"However, I believe that it is a mistake to take a narrow focus just on corporation tax and on Foreign Direct Investment. There is an opportunity to open up the debate on fiscal flexibility that should be advanced, not least because of the reaction to the new rates system and the demand for the introduction of a local income tax approach.
"While undoubtedly harmonising corporation tax rates will be of some advantage, particularly in relation to FDI, I believe that we need to look at all available options particularly in relation to the vital SME sector and how we can improve R &D and innovation within indigenous businesses.
"The key to progress is to allow a future Executive the fiscal flexibility to develop targeted fiscal instruments that can work within sectoral and geographical areas. Indeed new EU rules on state aid are to be announced in December that should also clarify this issue.
"This study is a valuable addition to the debate, and I now hope that the Programme for Government committee will meet shortly to take this vital debate forward." ENDS