Members of the business community in Northern Ireland have been disappointed with the results of the government's Varney review into taxation.

Stormont ministers were also hoping to see a cut in corporation tax to promote investment.

However, as a cut to 12.5% would cost the government £300m annually to match the rate of corporation tax in the Republic of Ireland, it is not going to be approved.

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Northern Ireland is disadvantaged in that the top rate is 30%, however this is being marginally reduced to 28% in April.

The Irish Republic's low corporation tax has been a key factor in its economic success. The parties have argued the tax cut would help them compete on a level playing field for foreign investment.

Another reason Varney didn't back the proposal was fears that if a special case is made for Northern Ireland it would draw companies away from other parts of the United Kingdom and lead the Scottish First Minister Alex Salmond and Welsh First Minister Rhodri Morgan to expect similar cuts.

(BMcC)