REVENUE WROTE OFF 20% OF UNPAID TAX LAST YEAR ON GROUNDS OF INABILITY TO PAY - The Revenue Commissioners wrote off 20% of unpaid tax from tax defaulters last year on the basis that they could not afford to pay the full amount, writes the Irish Times. New figures show that of the €70 million owed by tax defaulters up to September of last year, some €43 million was either paid or subject to "phased payment" agreements. However, the Revenue wrote off €14.5 million on the ground of inability to pay, while a further €12 million was referred for "collection enforcement proceedings" so there is no guarantee it will all be collected. The total amount of unpaid tax for 2012 is likely to be significantly higher as it does not include settlements for the final quarter of the year. These are expected to be published shortly. The amount of unpaid tax written off last year is a significant increase on 2011, when the equivalent for three-quarters of the year was some €6.5 million. Until recently tax defaulters were able to avoid having their details published if they refused to either agree liability or pay settlements. This loophole was closed off through legislation enacted two years ago. Since 2011, the liability of any significant tax defaulter who either fails to agree a settlement or to pay all or part of a settlement is automatically published.
DEVELOPERS SELLING HOMES BEFORE THEY'RE BUILT FOR THE FIRST TIME IN YEARS - Developers have started selling new homes off plans for the first time in more than five years, the Irish Independent can reveal. The ongoing recovery in city property markets combined with a bottleneck in the supply of family-sized homes means deposits are being put down in advance of construction for more than 100 new homes worth €23m in five developments in the greater Dublin area. Deposits of €5,000 are being put on homes that are selling for between €200,000 and €400,000. The trend follows a period since 2008 in which almost no new homes were sold. Estate agents said the revival of advance sales is down to a shortage of family-sized properties close to city areas caused, in part, by negative equity. The latter is preventing those who bought in the boom from selling and preventing second-hand property coming to market. The revival of advance sales also coincides with the publication today of a market sentiment study by Daft.ie showing that, for the first time since the crash, more than half of those surveyed (59%) believed property prices presented good value. The survey indicated an 8% increase in those wishing to buy - and that they expected to pay an average of €229,000.
CREDIT UNION OVERHAUL COULD COST €2 BILLION - The restructuring of the country’s credit union movement could cost more than €2 billion; rather than the €500m currently being put aside to cover the cost of change. According to one consultant, an overhaul of the movement could see the number of individual unions more than halve over the next five years, writes the Irish Examiner. David Jackman of global consultancy RGP - which has worked closely with a number of Irish-based credit unions in recent years - estimated that the overhaul of the sector, on the back of the recommendations put forward in the Credit Union Bill 2012, could result in the number of individual unions in Ireland dwindling from about 600 to 150-200 over the next two to five years. Additionally, Mr Jackman said the proposed €500m restructuring board fund - which forms part of the bill - may not be enough in a worst-case scenario. If the restructuring board fund is used solely to facilitate mergers and alliances between certain credit unions, the €500m may suffice, he said. However, if it needs to be stretched to bail out underperforming and financially constrained unions, then it won’t be and may need to be boosted by four or five times that amount, he estimated. Mr Jackman was speaking in the wake of Friday’s comments by EU commissioner, Olli Rehn, that Brussels is closely monitoring Ireland’s credit union sector, for fear of it having a negative impact on the country’s budget deficit over the next few years.
BERNANKE EXPECTED TO SMOOTH OVER DIVISIONS - Investors are likely to exercise caution in the early part of this week before Tuesday’s first leg of semi-annual Congressional testimony from Federal Reserve chairman Ben Bernanke, says the Financial Times. Global equity markets took a violent dip last week following the publication of minutes from the Fed’s last open market committee meeting, which revealed divisions within the board over the duration of its open ended asset purchases. Tuesday’s testimony to the Senate Banking Committee - repeated on Wednesday to the House Financial Services Committee - is likely to refocus on the merits of aggressive monetary easing, and to allay concerns about the inflationary impact of asset purchases of $85 billion a month that have seen the Fed’s balance sheet triple in size since 2008. Mr Bernanke, and vice-chairman Janet Yellen have both voiced their commitment to continue these purchases until the rate of unemployment falls to 6.5% or below. “There is no overwhelming consensus with regard to the fate of asset purchases, but we expect the chairman to walk back any perceived hawkishness emanating from the minutes,” says Michael Cloherty at RBC Capital Markets. Sentiment in the eurozone could also be tested early in the week by the outcome of Italy’s general election.