Northern Ireland commission could recommend devolution of more fiscal powers

Northern Ireland commission could recommend devolution of more fiscal powers

There is a case for the devolution of more fiscal powers to the Northern Ireland Assembly, the independent Fiscal Commission for Northern Ireland has said.

In its interim report, the commission said there is a case to consider the devolution of taxes including income tax, excise duties on alcohol, tobacco and petrol, and air passenger duty (APD).

The commission will analyse options for devolving these taxes in more detail before providing recommendations in its final report next year.

Paul Johnson, chair of the Fiscal Commission, said: “The NI Assembly already enjoys a high level of spending autonomy and controls most of the spending on public services here. However, other than rates on businesses and households, it has no substantive powers to vary taxes.

“The aim of our report is to explore the case for additional powers over taxation. We have looked, in some detail, at over 20 different UK taxes in order to produce a list of the ones we felt might be good candidates for devolution to Northern Ireland, as well as those which are less of a priority at this time.”

He said the taxes “we will prioritise for more detailed consideration” are income tax; fuel, alcohol and tobacco duties; stamp duty land tax; air passenger duty; the apprenticeship levy; and landfill tax.

Mr Johnson noted: “Neither Scotland nor Wales has power over excise duties, but the case for devolving excise duties to Northern Ireland is much stronger given the land border with the Republic of Ireland and the lack of a land border with the rest of the UK.

“Although we do think there is a case for devolving corporation tax, in our view, the issues are more complex both politically and technically than for other taxes. We therefore set out a roadmap of issues we see as needing to be resolved between the NI Executive and UK Government if this tax is to be pursued. We therefore do not include it on our list for further investigation.”

Welcoming the report, finance minister Conor Murphy said: “The commission’s interim report identifies a number of taxes which are suitable for devolution in the short-term.

“More tax powers could enhance local democracy, create more options for funding public services, and equip us with policy levers to deliver our social and economic priorities. I also recognise that more thought needs to be given to how greater local control over taxes would operate in practice.”

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