Sir, – If you allow Eoin Ó Murchú and me a few further exchanges we may be in complete agreement. On December 21st, Mr Ó Murchú wrote that the Northern Executive has no revenue-raising powers of its own. I pointed out (Letters, December 27th) that this is simply not the case and in support I offered the 2020-21 Budget introduced by Conor Murphy, Sinn Féin MLA and Minister of Finance. In response Eoin Ó Murchú acknowledges (he could hardly do otherwise) that the Executive has the power to increase the regional rate which would provide additional funding for central services (Letters, December 28th).
In his most recent offering he changes tack. Yes, the Executive has revenue-raising powers but any increase in the regional rate would be at the expense of the ordinary working people of the North. (In passing I wonder why working people are always “ordinary”, even when they do extraordinary things.)
This would be inconsistent with his understanding of Sinn Féin’s policies “in the South” which are directed at shifting the burden of taxation decisively on to those with the most resources.
If Eoin Ó Murchú sees a tax system where the burden is borne decisively by the better off as a consummation devoutly to be wished, he should rejoice – that battle has been won.
The most recent available figures from the Revenue Commissioners show that the 6 per cent of the total population of taxpayers with income in excess of €100,000 account for 48 per cent of the income tax take. Sinn Féin thinks this is not enough and says it would raise an additional €1.9 billion each year from higher earners. I have little doubt that the Sinn Féin arithmetic is predicated on the assumption that all higher earners will stick around for the party and, an even less likely scenario, that €1.9 billion per annum will be sufficient to pay for all its fantastic promises. We’ll see.
One hopes that Sinn Féin will have sharpened its pencil when it comes to dealing with taxation in its next election manifesto. We had a fine view of its magic money tree during the 2020 general election campaign. One recalls Mary Lou McDonald heroically explaining to Bryan Dobson how doubling the vacant site levy, as proposed in Sinn Féin’s manifesto, would cause a tax which yielded less than €900,000 in 2019 to contribute €107 million to the coffers of a Sinn Féin-led government.
Eoin Ó Murchú offers as an example of Sinn Féin’s powerlessness in Northern Ireland that it cannot bring in taxes on corporations. He may have forgotten that in 2015 the UK government published proposals to devolve corporation tax powers to Belfast.
The Fresh Start Agreement committed the NI Executive to reducing the tax rate to 12.5 per cent from 2018. It did not happen and in January 2020 the NI Minister of Finance, Conor Murphy, announced that the Executive “was not actively pursuing” a lower rate of corporation tax for Northern Ireland. The explanation was that, for NI to secure a reduction in the tax rate, it would have to agree to a reduction in the block grant it receives from London to fund public services.
Tellingly, politicians in Belfast, including a Sinn Féin Minister of Finance, preferred the certainty of the cheque from London to the potentially significant but uncertain benefits of a lower corporation tax rate. – Yours, etc,
PAT O’BRIEN,
Rathmines,
Dublin 6.