Sinn Féin election manifesto: Key policies analysed

This promise will come as no surprise as back in 2022, the then Sinn Féin finance minister Conor Murphy launched a public consultation on the possible devolution of taxation powers.

He appointed an independent Fiscal Commission, which concluded income tax would be the most effective form of economic devolution.

However, it warned there are “important considerations” about the political and administrative capacity for Stormont to take on new responsibilities.

It added the experience of Scotland and Wales showed this capacity could be developed over time so “it is not a reason in itself to not consider devolution”.

Income tax has been partially devolved in Scotland since 2016.

Since 2019, the Welsh government has also been able to vary rates of income tax.

The commission says that, drawing on the Welsh and Scottish experience, it should be possible “to realise significant increased fiscal devolution to Northern Ireland” by 2027/28.

While devolving tax powers presents opportunities, it also presents risks.

Collecting taxes locally would mean a corresponding cut in the block grant – the funding provided by the UK government.

For example, if income tax is devolved and the income tax base grows more slowly in Northern Ireland than the rest of the UK, this could lead to a loss of revenue.

Currently, the only significant revenue raising undertaken by Stormont is regional rates, a property tax paid by households and businesses.

Stormont was given the power to vary the rate of corporation tax in 2015.