NORTHERN Ireland looks set to be handed the power to slash corporation tax which will help it better compete with the Republic for inward investment.

The corporation tax rate in the North is 20pc, compared with 12.5pc in the Republic.

Businesses and political parties north of the border have been campaigning to have the rate brought into line with the Republic.

Senior sources in London and Belfast predict that an announcement will be made no later than October by British Prime Minister David Cameron.

Business lobby IBEC has said measures to boost the Northern Ireland economy would have a positive spill-over for the Republic.

IBEC chief Danny McCoy has previously said that there are more positives for the island as a whole from an all-island business model than the short-term competitive issues that may emerge from the North competing with the Republic.

“Having a vibrant all-island business model, I think it is in everybody’s interests north and south,” he said.

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