THE CASE for a lower rate of corporation tax in the North is stronger now than at any point in the past decade, British MPs were told yesterday.

The message was delivered by the Institute of Chartered Accountants in Ireland, when it took its campaign for a cut in the rate to Westminster.

They and many other members of the business community insist the North needs a corporation tax rate reduced to that in the Republic to allow it to properly compete with the South.

The institute told the Northern Ireland Affairs Select Committee there were no significant legal or fiscal impediments to the introduction of a 12.5 per cent rate and that the government should move now to provide the North with the means to expand its own economy.

Giving evidence to the committee on the report on taxation carried out for the treasury by Sir David Varney, who opted against a rate cut, the institute's president, Vincent Sheridan, said a low rate of corporation tax was a vital element in stimulating economic growth and productive job creation.

He said: "Sir David's review focused on differences between the Northern Ireland economy and the southern Irish economy.

"It ignores the significant similarities in language, culture, education, transport, telecommunications and business legislation. An all-island economy is a reality, accepted by the governments on both sides of the Border.

"Notwithstanding the tendency to focus on differences, the review does note that the imbalance of corporation tax rates is a significant obstacle to maximising the benefit of this shared economy. We welcome the review's recognition of this."

The institute's director of tax, Brian Keegan, told The Irish Times he was optimistic the committee had taken its argument seriously.

It is now up to the committee's MPs to decide whether they want to take the issue of the Varney review further. One avenue open to them would be to hold an inquiry into the conclusions of the report. (Additional reporting, PA)