I’m not sure that there has ever been a policy which hasn’t actually seen the cold light of day that has been more lobbied, discussed, written about or broadcast than the implementation of corporation tax powers in Northern Ireland.

The old clichés of six or seven years ago still ring loud, ‘it’s not the panacea but it’s a game changer’. Granted, legislation was passed at Westminster in 2015 to devolve powers to the Executive to support the undoubted potential for an uplift in foreign direct investment and of course enable the North to compete with the fine–tuned tax policy south of the border.

For such a small geographical location in global terms whether the outlook was to compete or indeed to complement assets North and South, enabling a more cohesive island wide economy better equipped to attract investment, mattered little. It was definitely a case of a rising tide, in a very small port, could lift all boats.

The corporation tax benefits achieved by successive Irish governments remain a cherished and revered policy, and of course, a stable diet of the economy. With the double Irish removed, international companies continued to heavily invest in the country with 80% of corporation tax, 25% of the labour force and 50% of income tax revenue coming from FDI in 2018.

Before momentum could be properly built around the policy in Northern Ireland and what it would mean for investment as well as the block grant, along came the Brexit vote in June 2016 closely followed by the collapse of the Assembly resulting in its three–year hiatus. That lost momentum and potential opportunity, seems somewhat out of step with what we face in a very different post Brexit, post COVID world.

Rishi Sunak’s corporation tax bombshell in March’s budget which would see the rate rise, albeit for larger companies, from 19% to 25% in 2023 is a far cry from the 12.5% that was being earmarked for Northern Ireland’s global competitiveness in the recent past. Fair play to Conor Murphy and the Department of Finance for establishing the Fiscal Council and Fiscal Commission and with it bringing in the ‘fiscal Messi’ in Sir Robert Chote to scrutinise the Executive’s finances and tax policies. A fundamental review of corporation tax policy will be part of that process, including how it would impact public spending and other, potential, new tax raising powers.

However, the abiding feeling is that the ship has sailed and that the rising tide of a few years ago is shifting considerably not only on the national but the international stage with moves afoot within the White House and a proposal with G20 Finance Ministers to establish a global minimum tax rate. Little wonder Pascal Donohoe, Ireland’s Finance Minister and President of the Eurogroup was quick out of the blocks to highlight concerns of a possible global rate for businesses, which of course could also see the demise of a key driver of economic growth in Ireland.

Of course, it is certainly true to say that the latest plans from the Biden administration to raise corporation tax in the US from 21% to 28% have injected new impetus into a dynamic that was already complex. Last week, Janet Yellen, President Joe Biden’s treasury secretary, and a former head of the Federal Reserve, grabbed headlines around the world with a call for countries to agree on a global minimum tax rate for large companies. The foray was not meant to be the end of the debate, more its latest iteration. Nonetheless, it is one that carries a significant punch given its source.

The comments from the US Treasury Secretary, that a global minimum tax rate would “make sure the global economy thrives based on a more level playing field” and would help end a “30–year race to the bottom”, have not been unwelcome from the perspective of some European economies. They also speak to what is perhaps a shift in attitudes towards and from businesses worldwide, which is that social purpose is increasingly more fundamental to the work of corporates. Similarly, the likes of the International Monetary Fund (IMF) and Organisation for Economic Co–operation and Development (OECD) have welcomed the intervention of the US, with the latter already working on a two pillared approach to global taxation.

However, the comments from Yellen and President Biden are not the beginning and the end. In terms of the wider debate, this has been underway for some time with plenty of disagreement and disruption. The intervention of the US is notable and goes further than the Trump administrations general support of a minimum tax floor. Internal plans within US politics are one thing, as are the difficulties in overcoming the OECD’s second pillar around taxing profits in areas where they have customers but not physical infrastructure. A swelling of support is not indicative on its own of fundamental change.

For the time being, as the mood shifts, both parts of the island need to take a strategic approach, watching developments unfold and assessing how to position in the end game. For the South particularly, should a minimum corporation tax rate take hold, it needs to reconfigure what and how it sells to foreign businesses with its low tax rate driving growth and supporting a remarkable recovery since the 2008 crash.

It potentially places more of an emphasis, both North and South, on collectively growing infrastructure, skills base, quality of life and delivering upon virtual connectivity as well as increased expectations around sustainability. That collaboration, with or without corporate tax harmonisation, is one that is gaining considerable momentum with industry experts such as Mark O’Connell of OCO Global stating that now is a prudent time for the island to assess how and where it can grow its collective international reach.

On corporation tax advocacy, while Northern Ireland is somewhat at the behest of the UK government’s not insignificant clout, the infamous Irish diplomatic corps will undoubtedly get to work, harmonising efforts with other low tax economies worldwide in an attempt to prevent them being bullied by the world’s largest economies. President Biden has made clear, a compromise is on the table and some experts say a floor could even be set at the Irish rate of 12.5%. A low corporation tax rate has been a mainstay of Irish courting of foreign investment and could still be, as part of a cohesive, collaborative and harmonised island economy of the future. However, it is once again under mounting threat and the writing could just be on the wall. Time to hedge those investment bets and polish all the strings to the bow.