REFORM OF INTERNATIONAL TAX COULD COST STATE UP TO €3 BILLION, CONFERENCE TOLD - International tax reform could cost the State €2-€3 billion in annual corporate tax revenues in the years ahead, according to a range of estimates presented at a Department of Finance policy conference yesterday.
The estimates, presented by international tax experts from PwC and the International Monetary Fund (IMF), relate largely to changes expected to emerge from an Organisation for Economic Cooperation and Development (OECD) reform process due to conclude next year. To combat tax avoidance by major multinationals, the OECD is looking at fundamental issues such as where profits are subject to tax, along with how corporate tax should handle digital business, says the Irish Times. While the outcome is still not clear, it looks likely that more tax will be collected in major markets where companies have most of their sales, and less in countries like Ireland, where they have their international headquarters. The OECD process is also examining specific anti-evasion measures, including a possible minimum corporate tax rate. A study by consultancy firm Copenhagen Economics on the possible implications of this for the Nordic countries estimated that about 20% of their corporate tax base could be exposed if one of the OECD reforms goes ahead. On the same basis, the changes in the pipeline could cost the Republic €2 billion - or about one-fifth - of annual corporate tax revenue, according to Edwin Visser, a tax partner at PwC Netherlands. He also warned that, depending on how the reform programme played out, it could lessen Ireland's competitive edge in attracting new investment in the years ahead, a possibly more serious economic impact.
BUILDER SKILLS DEARTH GROWS, NEW REPORT SHOWS - A skills shortage in all areas of construction has worsened in recent months, with a lack of carpenters and plumbers leading to a squeeze on project delivery, a new report has found.
A report by the Society of Chartered Surveyors Ireland (SCSI) and PwC said a lack of electricians and civil engineers were also more severe than last year. Construction industry figures have long warned about the strain on traditional trades, while third level chiefs have voiced concern that yearly placements in courses such as tiling have dropped to single digits, writes the Irish Examiner. The report found 88% of chartered surveyors reported shortages of carpenters, up from 69% last year, while 87% experienced shortages of plumbers, up from 70%. Some 87% had shortages of bricklayers, up from 75% last year, the report said. PwC Ireland’s Joanne Kelly said: "Acute skills shortages in the Irish construction sector have persisted since the recession and continue to be the single biggest obstacle holding back construction output. Significant investment in education and training is required, as well as more co-operation between Government and industry, if the housing shortage was to be tackled, Ms Kelly said. The report said tender price inflation and planning regulation issues are also holding back progress, with four out of five chartered surveyors saying they have difficulty accessing finance.
INSURANCE REVAMP CALLS INTENSIFY AS PLAY CENTRES SAVED BY UK DEAL - The Government has been urged not to ease up on insurance reform after 1,000 jobs were saved when play centres secured insurance cover.
Some 61 play centres were threatened with closure over difficulties getting insurance. The Alliance for Insurance Reform said there was still a need for major changes in the insurance and legal sectors. Meath businesswoman Linda Murray has managed to keep her play centre in Navan open by securing insurance for her firm, and 60 similar facilities across the country. Soaring premiums and the reluctance of some insurers to quote businesses for cover because of false and exaggerated claims meant the play centres could not get cover, writes the Irish Independent. Ms Murray broke down when she told TDs and senators on the Oireachtas Finance Committee about the situation. She begged committee members: "Save our livelihoods, save the livelihoods of our staff, and give our children somewhere to play." Ms Murray feared her play centre would have ended up shutting with the loss of 12 jobs. Insurers were quoting a premium for the next year of €16,500, a 1,000% rise in the past five years. She started up a group of 61 play centres, called the Play Activity and Leisure Ireland (PALI). That group has now persuaded an insurance broker to get a UK provider to write policies for all of them. "We presented ourselves as a group and approached five in Ireland and 15 in the UK and two of the insurance companies in the UK agreed to underwrite us," she said. However, she is angry at the lack of help from the Government and the Irish insurance industry regarding her plight over the last number of months.
RECORD £3.4 BILLION LOANED UNDER UK HELP TO BUY SCHEME - The UK government lent a record £3.4 billion to house purchasers using the Help to Buy scheme last year as the desire to get on the property ladder outstripped concerns about the impact of Brexit.
Help to Buy lending rose by more than £500 million in 2018 and was up across all regions in England, according to figures released yesterday. Introduced in 2013, Help to Buy offers people with a deposit of 5% an interest-free loan of up to 20% of the price of a property, or 40% in London. The average property bought using Help to Buy in 2018 cost £291,820, up from £280,679 in 2017. The value of an average Help to Buy house in London rose from 446,811 in 2017 to 450,600 in 2018, says The Times. House prices in London fell by 1.4% over that time. Lawrence Bowles, research analyst at Savills, the property consultancy, said "Continued appetite for Help to Buy shows that there is a deep underlying demand for new homes in spite of Brexit uncertainty. Households using the equity loan need less time to save for a deposit and will have lower mortgage borrowing costs, with only a nominal fee to pay on the equity loan for the first five years. This highlights that the fundamental constraint on the housing market in London and the south is affordability," he said.