Cut tax and VAT to help economy, says top NI merchant
Published: 29 June, 2011
BELFAST: Northern Ireland's economy need decisive action now so boost activity said Ian Haldane, managing director of Haldane Fisher, one of Northern Ireland's largest building suppliers.
"Northern Ireland faces a unique set of circumstances which means the government needs to take positive initiatives which have both immediate and medium-to-long-term effects," he stated in an interview with the Belfast Telegraph published yesterday.
"In Northern Ireland our specific circumstances mean that we are heavily dependent on government expenditure and we are the only part of the UK with a land-border to a separate tax regime."
"In this recession we've seen downward revenue since 2007. At the moment the decline is definitely slowing but it may take between three and five years before we see a significant improvement in the market," he added.
"A reduction in corporation tax means that we can reinvest in our business. Concerns that a reduction in tax will simply mean more money for a few rich business people are ill founded. What it means is more money to reinvest in training, skills, staff, materials and machinery, with a resulting increase in profitability and employment," Mr Haldane commented.
But the proposed devolution of corporation tax could take up to two years to implement. "In the Isle of Man, where we have significant operations, their government was recently faced with a £100m reduction in support from London – a huge amount for an island of about 75 000 people. Their politicians lost no time in responding to the needs of what is a much smaller economy than Northern Ireland.
"One measure was the continuation of a 5% VAT rate for materials used in renovation, maintenance and improvement projects. This has acted as a support to the construction sector, helping tradesmen and small business owners with an immediate reduction in costs.
"A tax on any activity acts as a disincentive and the continuance of this tax on the Isle of Man has provided much needed support for the construction sector at a very critical time. Crucially the continuance has maintained business confidence, that intangible but vital consideration for anyone making spending decisions," he concluded.