Tax Break

Essential reading: Treasury resists Northern Ireland corportion tax cuts plan, and more

June 26, 2012

Welcome to the top tax and accounting headlines from Reuters and other sources.

* Treasury resists Northern Ireland corporation tax cuts plan. Jamie Smyth – The Financial Times. A plan to devolve the power to reduce corporation tax to the Northern Ireland assembly is being resisted by the Treasury, denting hopes that lower taxes can be introduced to boost an economy hit by three decades of violence. Ministers from the UK and Northern Ireland government held a third meeting on Monday to discuss the proposal, which would enable Northern Ireland to cut its corporation tax rate to 12.5 per cent to match that of the Irish Republic. Link

* New rules may make public pensions appear weaker. Lisa Lambert and Nanette Byrnes – Reuters. New accounting rules approved on Monday are likely to show public pension funds are in a weaker financial position than previously thought and intensify disputes over how public retirement systems are funded. State and local governments will have to post their net pension liability – the difference between the projected benefit payments and the assets set aside to cover those payments – up front on financial statements, under the changes. Link

* N.J. budget vote sets up showdown with Christie. Heather Haddon РThe Wall Street Journal. New Jersey Democrats pushed through a $31.7 billion budget in a party-line vote Monday, setting the stage for a possible veto by Republican Governor Chris Christie later this week. The bill substitutes a property-tax credit for Christie’s proposal to cut income taxes by 10 percent, with a delay until revenue figures can be further studied later this year. Link

* EU exec sets steps to tax 2.4 trillion euro shadow economy. Francesco Guarascio – Reuters. The European Union is losing ound 1 trillion euros a year in tax evasion at a time when governments are struggling to improve public finances, the European Commission will say on Tuesday as it proposes steps to deal with tax fraud. The 27-nation EU, and especially the 17 countries in the euro zone, badly need higher tax revenues at a time when the economy is stagnating or contracting and investors lose confidence in government’s ability to service large debts. Link

* Japan must ensure sales tax doesn’t hurt economy-finance minister. Reuters. Japanese Finance Minister Jun Azumi said on Tuesday the government needs to ensure that a planned sales tax hike does not lead to an economic downturn. Azumi made the remarks after Japan’s lower house approved a plan to double the sales tax on Tuesday to help curb the nation’s snowballing debt. Link

* City hall budget deal, for now, includes few layoffs and no tax increases. Despite uncertainty over hundreds of millions of dollars in anticipated revenue, Mayor Michael Bloomberg and the City Council agreed Monday on a $68.5 billion budget for the coming fiscal year that would avoid tax increases, firehouse closings and widespread layoffs. Since February, the city calculated that tax revenue had increased more sluggishly than had been anticipated, while costs for social programs, including ones for the homeless, had risen more rapidly. Link

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