Today in the pressWednesday 31 July 2013 10.45
US CORPORATE TAXES TO FALL BUT EXPERTS SAY THAT IRELAND IS SAFE - US President Barack Obama wants to slash his country's high corporate tax - by more than a quarter in some cases - to boost jobs. The news will raise concerns that Ireland could lose out if US firms are encouraged to increase investment at home at the expense of expansion here, as a result of the move, says the Irish Independent. However, experts say this country should weather even a significant US tax cut. President Obama was due to announce his "grand bargain for middle-class jobs" in a speech at a new Amazon.com warehouse in Tennessee late yesterday but the details were circulated well in advance. The tax cuts are part of a plan to break a budget deadlock between Democrats and Republicans in Washington by putting together a package of measures, including lower taxes - to appeal to the political right - and measures aimed at job creation to appeal to the US left. Mr Obama also wants to change the tax rules on foreign earnings in an effort to get companies to bring overseas profits back to the US, minimise corporate tax avoidance and lower the use of off-shore tax havens. For Ireland any changes to the US tax regime will be the most closely watched aspects of the wider plans.
CENTRAL BANK MOVES TO REIN IN DEBT COMPANIES - The Central Bank is preparing to move against debt management companies which have been allowed set up in the Republic in recent years without offering consumers any level of protection despite handling tens of millions of euro each year. The regulator has outlined a series of new rules on how such businesses operate and has published a consultation paper on draft standards for the sector, writes the Irish Times. Several companies which collected money from consumers with the promise of better managing their finances and paying their bills in a timely fashion have gone out of business in recent years with those who relied on them for support losing millions of euro without being given any chance of recompense. One of the most high profile was Dunne & Maxwell. Last year the Central Bank wrote to hundreds of customers of the Dublin-based debt management company and strongly recommended they suspend all payments to it immediately and said people should “consider contacting the Garda” if bills to be paid on their behalf by the company were not up to date. The bank acted “in the public interest and as part of a general review of the debt management sector”. It had inspected the company and had “reasons to be concerned” about the nature of its operations and its “handling of customers’ money”.
SETANTA CLAIMS BIG IMPROVEMENT ON 2011 RESULTS - Setanta Sports yesterday said it has seen a dramatic improvement in the Irish group’s financial position compared to 2011, reports the Irish Examiner. A spokesman confirmed the improvement, as figures show that Setanta subsidiary, Setanta Sports Channel Ireland Ltd plunged into the red to record pre-tax losses of €1.47m in the 12 months to the end of December 2011. This followed the firm recording a pre-tax profit of €55,049 in 2010. The firm going into the red came after revenues dropped by 19%. The abridged accounts do not disclose the revenue figure. However, the firm’s gross profit during the year declined by 48% from €3.3m to €1.78m. The directors reported that they are satisfied that the business will generate profits in the foreseeable future. The focus of the company going forward will be to stabilise existing revenue streams and tightly control costs. The firm had a shareholders’ deficit of €1.27m. The firm had accumulated losses of €43.35m and this was offset by a share premium account of €42m. On the firm’s going concern status, the directors state they are confident that financial support will be available from the shareholders and that it is appropriate to adopt the going concern status.
BANK OF ENGLAND HELPED SELL LOOTED NAZI GOLD - The Bank of England played a vital role in one of the darkest episodes in central banking history, facilitating the sale of gold looted by the Nazis after their invasion of Czechoslovakia in 1939, says the Financial Times. According to a hitherto unpublished history of the BoE’s activities in and around the second world war, the UK’s central bank sold gold on behalf of the Reichsbank - which Germany’s central bank had seized from its Czech counterpart - after the UK government had frozen all Czech assets held in Britain following the Nazi invasion. In March 1939, gold valued at the time at £5.6m - worth £736.4m in today’s prices - was transferred from the National Bank of Czechoslovakia’s account at the Bank for International Settlements, the so-called central bankers’ bank, to an account managed on behalf of the Reichsbank. The episode has long weighed on the reputation of the BIS. However, what has received less attention is the role of the BoE in the affair. What emerges from the history, which appeared on the BoE’s website on Tuesday, is that the UK’s central bank prioritised the appeasement of the BIS over the British government’s wishes to freeze the sale of Czech assets.