Tuesday, 27 November 2012
The Monetary Policy Committee of the Bank of Mauritius keeps the Key Repo Rate unchanged
The Monetary Policy Committee (MPC) of the Bank of Mauritius has decided by majority vote to keep the Key Repo Rate unchanged at 4.90 per cent per annum at its meeting today.
The MPC noted that there are tentative signs of a bottoming in the global economy although downside risks from the euro crisis remain elevated. The Eurozone is expected to record very marginal positive growth in 2013 after emerging from recession. The UK is projected to rebound from recessionary conditions, with an expected growth of around 1 per cent. The US economy is expected to overcome its fiscal cliff and grow at around 2 per cent. Emerging economies will continue to outperform advanced economies in 2013 amid some evidence that China and other emerging Asian economies are picking up. Global inflationary pressures remain contained at this stage but commodity prices, in particular food prices, may still represent a major upside risk.
The domestic economy has withstood the external headwinds relatively well, notwithstanding the slowdown in growth dynamics and price pressures in major export sectors. The output gap remained negative, with the economy operating below trend. Projected growth for 2012 is maintained at 3.3 per cent and a preliminary Bank of Mauritius staff estimate for 2013 shows a pick-up to a range of 3.6 – 3.9 per cent as economic conditions stabilise in main trading-partner countries.
The MPC noted that year-on-year and core inflation rates have increased since the last MPC meeting. Upside risks to inflation have arisen from elevated global food prices, recent rupee depreciation, the expected impact of the PRB award, the anticipated adjustment in retail petroleum prices and recent budgetary measures. These higher risks are reflected in the Budget forecast for headline inflation of 6 per cent in 2013. The MPC noted that Bank of Mauritius staff forecast put year-on-year inflation at 5.7 per cent by December 2013 on a no-policy change basis.
The MPC discussed alternative interest rate scenarios. After a third round of voting, a majority of members voted to keep the Key Repo Rate unchanged given continuing uncertainty on the global economic outlook. Some members voted for a marginal increase in the Key Repo Rate to signal their worries over the worsening inflation outlook while anchoring inflation expectations. The MPC expressed strong concerns over a possible resurgence of inflation. It reiterated that the structural weaknesses in the economy cannot be addressed by monetary policy.
The MPC maintains strong vigilance in monitoring economic and financial developments and stands ready to meet in between its regular meetings, if the need arises.
Reproduced from the BOM website
Reproduced Courtesy - Guardian Online Newspaper Edition.
UK is looking at the international ramifications of offshore entities on tax revenue on the UK economy, it follows India willingness to see through the structures set up to invest in India leading to the famous Vodaphone case.
Staff at agencies that set up companies in the UK and abroad have been filmed undercover, making it clear that nominee directors are regularly used as shams.
The startling footage is from a parallel investigation by BBC Panorama, to be broadcast late Monday.In one section, an undercover reporter told James Turner of York-based Turner Little: "I've got this money in a Swiss bank and I haven't paid the tax on it. So what I need to do is get it out of there."
Turner suggested an offshore structure with a foundation in Belize: "It doesn't link back to you, it doesn't link back to your family. So it gives you complete confidentiality."
Nominee directors would be used, he said, because "they don't know who you are, they've never heard of you … They won't even know that they are a director, they just get paid … We have a stamp of the nominees' signatures. Which is kept in my safe. So the nominee never sees any paperwork at all."
Another undercover reporter, using a different cover story, told a representative of the Dubai-based Atlas Corporate Services that confidentiality was a fundamental condition for him. Atlas administrator Luke Pidgeon suggested using nominee directors. He explained this would keep the client's name away from the company itself. Pidgeon claimed half of the nominees on Atlas's books were not even aware of the companies to which they were appointed. They simply provided signatures as necessary, he said.
The BBC's undercover team filmed the Atlas founder, former Sark islander Jesse Hester, at his Mauritius headquarters in the Indian Ocean, advising on how to dodge British tax on the £6m in a Swiss bank. He suggested, "off the record", that they use an offshore entity in Panama."If there's a tax issue … they won't disclose any information on that foundation under Panamanian law," he said.
The odds on the British tax authorities catching up with the potential customer were low, he promised: "Tax authorities don't have the resources to chase everybody down … They reckon it's probably the same rough odds as probably winning the lottery."
Another incorporation agency operator told the undercover reporters: "My risk in all of this is I could be seen to be helping somebody evade tax, or something like that yeah and so that's where the risk is."An undercover reporter also approached Readymade Companies Worldwide, a firm in Bushey Heath, Hertfordshire, saying he represented Indian government figures who wanted to hide their funds.
Its managing director, Russell Lebe, gave assurances about not releasing information to tax authorities: "If we were approached by the Indian tax authority … and they're doing tax evasion, we wouldn't give a monkey's."
He and a colleague agreed that they would accept a false statement about who was the beneficial owner, in order to keep the names of the real clients off the books.
"As far as all our files will show, obviously you'll be down as the owner … So there'll be no emails and nothing in writing to say that anyone else is the owner and it'll all go under your name. Absolutely fine. You know, this is a confidential – this is a confidential discussion we have, as far as anyone is concerned you'll be the owner."