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News : Irish Last Updated: May 1, 2013 - 11:51 AM


Wednesday Newspaper Review - Irish Business News and International Stories - - May 01, 2013
By Finfacts Team
May 1, 2013 - 10:10 AM

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The Irish Independent reports that homeowners have been warned they have just days to file a property tax return.

Anyone who is filling out a paper-based return and posting it to Revenue needs to act in the next day or two, experts said.

This is because the deadline for paper-based returns is next Tuesday. But because next Monday is a bank holiday, homeowners would need to get the return in the post by Friday. And a spokeswoman for the Revenue warned about the impending deadline.

"If you are filing on paper, do it now," she said.

And director of taxation at Chartered Accountants Ireland Brian Keegan said because Monday is a bank holiday, homeowners were right up against the deadline for paper-based filing of the returns.

"After Tuesday, Revenue will not accept a local property tax return made using the paper return form," he said.

People who opt to file online have until May 28 to complete the return electronically.

Tax officials are also offering the option for people to file online over the phone by ringing 1890 200 255.

"You will need your property details and details of your bank account or other source from which you want the payment deducted," the spokeswoman said.

Asked about penalties for those who do not complete a property tax return, Revenue said penalties will not be imposed automatically. Tax officials will attempt to engage the taxpayer first.

But she warned: "If you don't send your completed return to Revenue, the penalty is the amount of tax due, subject to a maximum of €3,000.

"If you knowingly undervalue your property on the local property tax (LPT) return, the penalty is the correct amount of tax, subject to a maximum of €3,000."

Anyone who receives a return but is not the owner of the property still needs to contact Revenue with the name and address of the liable person.

"If you don't, we will still think you are liable, and will pursue you for the LPT in respect of the property," Revenue said.

Already some 332,500 returns have been submitted; 204,891 of these electronically. The Revenue's property tax helpline is 1890 200 255.

The Irish Independent also reports that the new boss of the Dublin Airport Authority, Kevin Toland, ruled out selling its international assets and said they have provided a financial lifeline during a time when the airport business in Ireland is struggling.

Releasing the DAA's results for 2012, Mr Toland – who took up his role at the beginning of this year – revealed that the group's international business was responsible for generating €27m of the group's underlying €29m pre-exceptional profit after tax last year. Airport activities at Dublin, Cork and Shannon generated a combined profit of just €2m, but all of that was made at the capital.

The DAA owns interests in a swathe of international businesses and assets via its Aer Rianta International (ARI) arm.

It includes a 20pc stake in Dusseldorf Airport, as well as interests in duty-free operations across the globe, in 11 countries such as China, India, Canada and Bahrain.

The DAA said the €27m in profits generated from the ARI unit included a €10.1m dividend from Dusseldorf Airport.

The total ARI profit figure, on an underlying basis, was 6pc higher than in 2011.

Deleverage

Mr Toland said he "didn't see any merit" in offloading any part of ARI. A sale of part of the business could help deleverage the DAA.

There had also been some calls for the ARI business – or at least part of it – to be transferred to Shannon Airport as part of its departure from the DAA structure at the end of December.

Mr Toland – the former head of Glanbia's US business – said the stake in Dusseldorf Airport is a "valuable investment".

"We would see no reason to part with that unless we got extraordinary value. If someone comes up with an extraordinary value, of course we'd consider our options at that point," he added.

"In the last two or three years, those foreign businesses and the income they produce, have given us massive benefit in terms of our financial security when you look at the core airport profitability," said Mr Toland.

The DAA's revenue edged 3pc higher last year to €575m, while group profit – excluding a €24m restructuring charge – was 66pc higher, coming in at €43m.

But those profits were boosted by a €13.7m gain related to the sale of a 50pc stake in Turckton, a property venture it had with Dunloe Ewart, which was formerly owned by Liam Carroll.

The DAA sold the 50pc stake to a subsidiary of Dunloe.

Mr Toland said a restructuring of Cork Airport continues and he hopes it will break even by 2014.

He said he also hopes there will be positive movement on an outstanding pension issue in coming weeks.

The DAA boss will also be doing customer service shifts at Dublin Airport next week, he said. Passenger numbers at Dublin rose 1.9pc to just over 19 million last year.

The Irish Times reports that Ireland faces at least two more years of tax increases and spending cuts before an easing of austerity in 2016, according to Government spending projections published yesterday.

However, according to the first formal projections for Government spending and tax revenues beyond 2015, a neutral budget in 2016 depends on recovery in the Irish and international economies, the successful implementation of austerity budgets every year up to 2015, and no large additional banking costs, according to yesterday’s Department of Finance report.

Also yesterday, the governor of the Central Bank, Prof Patrick Honohan, said he believed the banks would need further capitalisation before 2019, when new global rules on capital requirements for banks will come into effect. He did not give a figure for how much more capital he believed they would need.

If the budget in 2016 does not contain new taxes and spending cuts, it will be the first non-austerity budget since 2008. Under the Constitution, a general election must be held no later than the spring of 2016. It has been the long-held objective of the Coalition to have completed the budget adjustments before the next election.

The budget projections are contained in the Stability Pact Update, a three-year economic and budgetary forecast all EU member states must submit to the European Commission by the end of April each year. Along with a number of other governments, the Coalition submitted its update last night just before the end-April deadline.

Speaking to the Oireachtas Committee on Finance, Public Expenditure and Reform, the Minister for Finance Michael Noonan refused to be drawn on the 2014 budget, which is to be finalised by October.

He said that the new forecasts are underpinned by a “technical assumption” that the promissory note savings, secured in February, will be allocated to deficit reduction. Mr Noonan said that how the savings are used needed to be discussed with the EU-IMF troika. He added that his preference would be for increased investment in job creation.

In the first update of the Government’s economic and budgetary projections since Budget Day 2013 in December of last year, gross domestic product – the widest measure of economic activity – is forecast to expand by 1.3 per cent this year and 2.4 per cent in 2014.

In 2015-16, GDP growth is expected to grow by 2.8 per cent. In 2016 the unemployment rate is forecast to stand at 12.3 per cent, down from 14.7 per cent.

Mr Noonan stressed the figures are forecasts compiled by Department of Finance officials.

The Irish Times also reports that Irish banks will need more capital before 2019, the governor of the Central Bank of Ireland said yesterday following the publication of its 2012 annual report.

“By 2019, they will need more capital when Basel III comes into effect,” Mr Honohan said.

He declined to say how much the banks would need, adding that this would emerge when a fresh round of prudential capital ratio stress tests (known as PCARs) are conducted in September or October this year.

“PCAR will reveal just at what point over the next six years the additional capital will be needed,” the governor added.

These stress tests will apply to AIB, Bank of Ireland and Permanent TSB. Basel III deals with capital adequacy and liquidity requirements for international active banks. This latest accord increases the capital buffers that banks must hold.

Speaking yesterday at the joint Oireachtas Committee on EU Affairs, Mr Honohan said in an “ideal world”, all the capital needed by the banks “could be provided by the private sector”.

However, Minister for Finance Michael Noonan has a longer time-frame in mind. Yesterday afternoon he also asserted that while the PCAR is imminent, he noted that its “timing is under discussion”.

Stress tests

“If not this year it will be the first half of next year,” he said. This would coincide with similar stress tests planned by the European Banking Authority for next March.

Mr Honohan said “full implementation” of announced budgetary measures was “essential” to preserve market confidence in Ireland’s recovery. “I’m to sticking to the programme as designed,” he said.

The governor said adherence to the targets set out in the EU-IMF bailout had helped it re-enter capital markets in the past year and increased the prospect of a “successful exiting” from the programme at the end of the year.

Mr Honohan also referred to recent events in Cyprus, where certain depositors had their funds raided as part of an overall solution to the financial crisis in the country.

“I wasn’t wholly satisfied with the way Cyprus worked out. I would have done it differently myself. It’s water under the bridge now.”

The Irish Examiner reports: “We need that intergovernmental agreement. We need that this year; any delay to that, is a delay to the project. Each delay to the project curtails it,” said Mainstream Power’s founder and CEO Eddie O’Connor. 

“The earlier we get an intergovernmental agreement, the sooner we can start spending this money. Before we can spend seriously big money we need to see that both governments are committed.” 

Mr O’Connor was speaking at a conference in Tullamore where some of the world’s leading manufacturers of wind farm components and transmission technology met to discuss the potential of setting up a supply chain in the midlands worth at least €7bn. 

Between 2016 and 2020, Mainstream’s 5,000 megawatt Energy Bridge alone will require 1,700 turbine towers, 5,000 blades, 1,700 nacelles, 16,000km of inter-array cabling, 1,700 convertors, 30 electrical substations and 400km of HVDC underground cables. Rather than importing these materials, which are worth well in excess of €7bn, the plan is to attract these manufacturers to set up base in Ireland employing tens of thousands of people locally. 

Mr O’Connor said if you could show the companies the development was going ahead they would locate manufacturing plants here. 

Larry de Vaal, business development manager with wind turbine manufacturer XEMC Darwind said: “XEMC Darwind has already looked at manufacturing opportunities in Ireland and with a project of this scale there is a very real opportunity to locate component manufacturing, assembly, installation and long-term maintenance here in the midlands.” 

However, Mr O’Connor said that there is a narrow window of opportunity during which Ireland needs to move or else the whole project will fail. 

“We have taken an awful lot of risk upfront in anticipation that they (Government) will do what they said that they will do. 

“There is a need in Britain for renewable power as they are committed in law to have 15% of their power generated by renewables by 2020. We have a window of opportunity we either take it now, use it of lose it.”

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