The Bulgarian government on 18 May 2022 proposed a package of various anti-crisis measures to support citizens and businesses suffering the burden of high inflation. Among the suggested tax related measures are the following:
introducing a temporary 0% VAT rate for bread (currently subject to the standard 20% VAT rate);
introducing a reduced 9% VAT rate for heating, hot water and natural gas for domestic use;
increasing the threshold for mandatory VAT registration from BGN 50,000 to BGN 100,000 (from 1 January 2023); and
increasing the tax relief for child support, i.e. a deduction from the personal income tax base (from BGN 4,500 per child/per annum to BGN 6,000).
The government also proposes to tax public and private organizations that profit from electricity price hikes.
The government's proposal must be submitted to the parliament and voted on during two readings. Further developments will be reported when they occur.
The proposal, issued on 18 May 2022, is available here (in Bulgarian only).
The National Revenue Agency published an updated version of the 'Manual on Corporate Income Taxation' for 2022. The publication contains an overview of the applicable rules in the Corporate Income Tax Act with many practical examples.
The updated version of the manual, issued on 11 May 2022, is available here (in Bulgarian only).
The People's Government of Guangdong Province released on April 28, 2022 the Action Plan of Guangdong Province on Stepping up Financial Support for Covid-affected Enterprises to Overcome Difficulties and Keeping Stable Economic Performance.
The Plan called for increasing financial support for Covid-affected sectors, urging financial institutions to support those sectors and micro, small and medium-sized enterprises (MSMEs) by cutting the required reserve ratios. It proposed that local competent departments in charge of accommodation, catering, wholesale and retail, cultural tourism, civil aviation, highway, waterway and railway transport should send a list of enterprises in difficulties to local financial regulators so that they can get more credit support from banks. For those micro and small businesses applying for loans with local corporate financial institutions for the first time from April 1 to June 30, 2022 by relying on the financing platform for SMEs in Guangdong, subsidies on interest payment would be offered at a percentage of no more than 1% for the balance of any single business that does not exceed 10 million yuan.
China's consumption is expected to sustain its recovery momentum as the impact of COVID-19 is gradually brought under control and supportive policies take effect, said an official with the Ministry of Commerce (MOC) Thursday.
In response to a question on the year-on-year decline in China's retail sales in April, MOC spokesperson Shu Jueting said that it was mainly due to the COVID-19 epidemic.
Shu said the impact of the virus on consumption is "temporary" as the strong resilience, great potential and sound long-term development fundamentals of China's consumption remain unchanged.
Official data showed China's retail sales of consumer goods in April declined 11.1 percent from a year ago to 2.95 trillion yuan ($436.9 billion). In the first four months of this year, its retail sales went down 0.2 percent from a year earlier.
The Shanghai Municipal Tax Service released on May 20, 2022 its No. 1 Announcement in 2022, deciding to conduct the pilot program for fully-digitalized electronic invoices in Shanghai.
It is clarified that, starting from May 23, 2022, the pilot program for fully-digitalized electronic invoices (E-invoices) will be conducted in selected taxpayers in Shanghai, and the taxpayers should be those using the e-invoice service platform, with the specific scope determined by the Shanghai Municipal Tax Service. The pilot taxpayers are divided into the taxpayers who issue invoices via the e-invoice service platform and the taxpayers who use digital tax accounts via the e-invoice service platform. They may apply to the related provisions of the Announcement based on their specific invoicing requirements and use of the digital tax accounts, and the scope of the drawees to which the invoices are issued via the e-invoice service platform should be the taxpayers within the jurisdiction of the Shanghai Municipal Tax Service.
China will ramp up multiple policy supports, including cutting costs and increasing funding, to help small and medium-sized companies tide over difficulties, officials told a press conference on Wednesday.
China's small and medium-sized firms logged stable growth in the first quarter of 2022, with the combined revenue and profit of major industrial companies up 14.1 percent and 6.5 percent year on year, respectively, Vice Minister of Industry and Information Technology Xu Xiaolan said.
To address difficulties faced by smaller firms in costs, financing and logistics, local authorities have introduced policies to offer subsidies for spending on rent, utilities, loan repayments and social security premiums, Xu said.
The country has also taken multiple measures to increase inclusive loans and clear arrears for smaller firms, while promoting work resumption at key smaller firms on the industrial chain and boosting market demand.
The ministry will further promote the implementation of the supporting policies, prevent and clear arrears owed to smaller businesses, facilitate the symbiosis of small, medium and large companies, and build a system to nurture high-quality smaller firms, Xu said.
In terms of financing support, China will guide large state-owned banks to offer 1.6 trillion yuan (237.31 billion U.S. dollars) of inclusive loans to micro and small firms this year, said Mao Hongjun from the China Banking and Insurance Regulatory Commission.
The commission will also encourage banking and insurance institutions to increase credit loans and ease the difficulties of loan repayments for smaller firms, and help them better cope with risks by offering tailored services and insurance products.
The National Development and Reform Commission ("NDRC") and the Ministry of Commerce ("MOFCOM") released on May 10, 2022 the Catalogue of Industries for Encouraged Foreign Investment (2022 Edition) (Exposure Draft) for public comment until June 10, 2022.
Compared to the 2020 edition, the 2022 Catalogue added 238 items, revised 114 items (mainly expanding the areas covered by the original items), and deleted 38 items. Its main changes include further encouraging foreign investments in manufacturing, with addition or expansion of components, spare parts, equipment manufacturing and other items in the National Catalogue; further encouraging foreign investment in producer services, with addition or expansion of professional design, technical services and development, and other items in the National Catalogue; and further encouraging foreign investment in the central, western and northeastern regions, with addition or expansion of the relevant items in the Encouraged Catalogue for Western and Central Regions based on the region's advantages in workforce and featured resources, and the needs for attracting investment.
The Ministry of Finance ("MOF") and the State Taxation Administration ("STA") have jointly released the No.18 Announcement in 2022, clarifying the policy of waiving the value-added tax (VAT) for courier and express delivery services.
Specifically, during the period from May 1 to December 31, 2022, the revenues generated by taxpayers from providing residents with courier and express delivery services for essential goods would be exempted from VAT. The specific scope of the services would be subject to the Explanatory Notes on the Sales of Services, Intangible Assets and Immovable Properties as released under the No. 36 Document of the MOF and the STA. Covered by the category of logistics supporting service of the modern services, the services refer to the business activities of related companies in receiving, sorting out, and delivering letters and parcels within the promised time limit.
The State Taxation Administration ("STA") recently released its Announcement on Facilitating Handling of Export Tax Rebates to Promote Stable Growth of Foreign Trade, in order to implement the supporting measures for export tax rebates as unveiled in the STA No.36 document in 2022.
The Announcement refined the required materials and items for streamlined claims of export tax rebates, simplified the tax handling process, and optimized the tax refund management and reminder services for taxpayers to comply with. It also improved the export tax rebate policy for processing trade, saying that processing trade firms entitled to tax exemption, deduction and refunds may convert the carried-over taxes that cannot be exempted, deducted or refunded due to the levying and refund tax rates previously into the corresponding amount of input VAT for rebates after the country implements consistent levying and refund tax rates for export products.
It is stressed that efforts would be made to strengthen the linkage of export credit insurance and export tax rebate policies. Specifically, if, for an export business for which an enterprise declares tax rebates, the enterprise has got export credit insurance payment due to failure to receive the foreign exchange, the export rebates should be processed by regarding the export credit insurance payment as the foreign exchange. It is also clarified that joint efforts would be made to combat illegal and criminal acts such as false exports and fraudulent acts for export rebates to create a better business environment for exporters.
The Ministry of Finance ("MOF") and the State Taxation Administration ("STA") released on May 18, 2022 the Announcement on Accelerating the Implementation of the Policy of Refunding Excess Input VAT Credits at the End of Periods.
It is clarified that the work towards refunding outstanding VAT credits to large companies will start ahead of schedule. It changed Paragraph 2, Article 2 of No.14 Announcement of the MOF and STA in 2022 from that "eligible large companies in manufacturing may apply for one-off refunds of outstanding VAT credits with the tax authorities from the tax declaration period in October 2022" into that "eligible large companies in manufacturing may apply for one-off refunds of outstanding VAT credits with the tax authorities from the tax declaration period in June, 2022." Prior to June 30, 2022, outstanding VAT credits will be refunded to large companies in a centralized manner on the basis of voluntary application of taxpayers.
Risk-sharing facility signed by British International Investment to provide systemic liquidity and help Citi, a global leader in trade and supply chain finance solutions. This facility will help grow its supply chain finance product across Africa.
(CEO Business Africa)
Rides recorded by Uber across all its markets in Africa. This milestone comes nearly a decade since the mobility tech company launched in South Africa before expanding into other African countries, creating over 6 million economic opportunities.
Biomass power plant under construction in Côte d'Ivoire, making it the largest such facility fuelled by agricultural waste in West Africa. Built at an estimated cost of $276 million, the plant will be transferred to the state of Côte d'Ivoire after the conclusion of the 25-year concession tenure.
Estimated financing sub-Saharan needs to access reliable electricity and clean cooking facilities between now and 2030. According to the Minister of State for Petroleum Resources in Nigeria, an annual investment of $35 billion could bring electricity access to 759 million Africans who currently lack it.
Farmers set to benefit from AfDB’s $1.5 billion emergency food facility to help African countries avert a looming food crisis caused by Russia’s war in Ukraine and persisting impacts of the Covid-19 pandemic.
Percentage by which Shelter Afrique's debut bond in Nigeria was oversubscribed, demonstrating investor confidence in the local housing market. The pan-African housing finance and development institution will use the bond proceeds to fund mass-housing developments and to provide lines of credit.
(Africa Global Funds)
Funding launched by African Finance Corporation to to support bank-driven economic recovery and resilience in Africa. This facility, dubbed African Economic Resilience, will be disbursed via loans from AFC to select commercial banks, regional development banks and central banks in various African countries.
Nigeria's share of oil and gas projects starting in Africa between now and 2026, with 109 of the continent's 400 oil and gas projects expected to be launched in the West African country. Of these, the largest proportion will be in the downstream refining segment, which should see 38 projects come on-line.
(Energy Day Nigeria)92.4 million litres
Milk produced by Zimbabwe’s leading dairy processor, Dairibord Holdings, resulting in 55% growth compared to the previous year. This jump in production was largely driven by significant growth in the beverages segment, with production volumes up by 84%, while foods jumped by 34%.
(Food Business Africa)
Fund closed by Cape Town-headquartered venture capital firm Havaic to boost early-stage tech investments in Africa. Launched in partnership with Universum Wealth, the fund will invest in impactful tech companies in South, East and West Africa.
Growth recorded by Cadbury Nigeria Plc for the first quarter of 2022. The pre-tax profit growth follows a 52% fall in profits in 2021, as rising costs outstripped revenue growth over the year. The company attributed the growth to its repositioning strategy within a challenging environment.
(Food Business Africa)
Geothermal power to be added to Kenya’s national grid in the next five years under a project by KenGen to rehabilitate some of its geothermal power plants and upgrade others as it continues with exploration around Olkaria and Eburru.
Funding target by AfDB for climate resilience projects across Africa by 2025, doubling the bank's commitment over the last five years to helping countries mitigate and adapt to the effects of climate change.
(The East African)
People living with hearing impairment set to benefit from the first sign language app launched in Kenya. The app aims to close the communication gap and simplify communication with people in health, education, judicial system, and finance.
Estimated increase in share earnings projected for South Africa’s leading integrated poultry producer, Astral Foods Limited. The improved earnings were achieved through rising poultry sales volumes resulting from significant capital investments to enhance Astral’s poultry production and processing capacity.
(Food Business Africa)
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The government seeks to increase digital service tax from 1.5% to 3% of the gross transaction value. The proposal is one of several amendments contained in Finance Bill 2022, intended to enhance revenue collection.
The Bill further proposes to amend the VAT Act, to clarify that the requirement for mainstream VAT registration does not apply to persons supplying imported digital services over the internet or through a digital marketplace. The Value Added Tax (Digital Marketplace Supply) Regulations of 2020 provide for these persons to register through a simplified VAT registration framework. They may also appoint a tax representative if they elect not to register. Unlike the mainstream VAT registration, that requires an annual turnover threshold of KES 5,000,000, the Regulations do not provide for a registration threshold.
The Bill has been submitted to the Parliament's Departmental Committee on Finance and National Planning for review. If accepted, the proposed amendments will take effect from 01 July 2022.
The South African Revenue Service (SARS) has published a comprehensive guide to dividends tax, Issue 5. The purpose of this guide is to assist taxpayers in gaining a more in-depth understanding of dividends tax. The foundation for this guide can be found in the various explanatory memoranda which supported the dividends tax legislation, but the explanations contained in these explanatory memoranda have been expanded with additional explanations and examples.
The guide deals, amongst others, with the following:
introduction to dividends tax;
the definitions of a company, contributed tax capital, dividend, dividend cycle, equity share, foreign dividend, listed company, listed share, share, beneficial owner, return of capital and regulated intermediary;
levy of dividends tax, liability for dividends tax, deeming provisions and special rules applying to specified companies;
exemption from dividends tax and relief from double taxation;
withholding of dividends tax;
secondary tax on companies credit;
payment and recovery of dividends tax assessments, non-compliance, electronic communication and record-keeping;
refund of dividends tax;
rebate against normal tax or dividends tax in respect of foreign taxes on dividends; and
company reorganisation rules – contributed tax contribution and dividends tax.
The information in this guide is based on the income tax and tax administration legislation (as amended) at the time of publication of this guide and includes the Rates and Monetary Amounts and Amendment of Revenue Laws Act 19 of 2021, the Taxation Laws Amendment Act 20 of 2021 and the Tax Administration Laws Amendment Act 21 of 2021. These Acts were all promulgated on 19 January 2022.
Eligible taxpayers can provide information about their expected domestic rent paid in relation to YA 2022/23 in the tax returns for YA 2021/22 to be issued this June.
The Inland Revenue (Amendment) (Tax Deductions for Domestic Rents) Bill 2022 will be gazetted on May 6 and introduced into the Legislative Council (LegCo) on May 11. It seeks to implement the tax deduction for domestic rent proposed in the 2022-23 Budget. The Government hopes to secure passage of the Bill before the summer recess of the LegCo this year, so that the measure could be implemented from the year of assessment (YA) 2022/23.
Eligible taxpayers can provide information about their expected domestic rent paid in relation to YA 2022/23 in the tax returns for YA 2021/22 to be issued this June. Upon passage of the Bill, the Inland Revenue Department will take into account the deduction when assessing the provisional salaries tax for YA 2022/23.
A government spokesperson said today (May 4), "The measure aims at easing the burden on taxpayers liable to salaries tax and tax under personal assessment who do not own any domestic property. It is expected to benefit about 430 000 taxpayers. The government revenue forgone will amount to about $3.3 billion per year."
According to the Bill, a taxpayer liable to salaries tax or tax under personal assessment may claim deduction for the rent paid by him/her or his/her spouse (who is not living apart from him/her) as tenant (or by both of them as co-tenants) in relation to a relevant YA for renting eligible domestic premises. The proposed maximum amount of allowable deduction is $100,000 for each YA.
To meet the eligibility, the relevant premises must be the taxpayer's principal place of residence, and the relevant tenancy must be stamped.
To ensure that it is a targeted measure that supports taxpayers who are most in need, forestall abuse, and prevent potential double tax benefit or tax avoidance, the Bill proposes to provide for certain circumstances in which the deduction is not allowed, including:
the taxpayer or his/her spouse (who is not living apart from the taxpayer) is a legal and beneficial owner of any domestic premises in Hong Kong;
the landlord or principal tenant of the rented domestic premises is an associate of the taxpayer or his/her spouse (e.g. the landlord is the taxpayer's spouse, or a parent, child, sibling or partner of the taxpayer or his/her spouse);
the taxpayer or his/her spouse (who is not living apart from the taxpayer) is provided with a place of residence by his/her employer;
the taxpayer or his/her spouse (who is not living apart from the taxpayer) is a tenant or authorised occupant(s) of a public rental housing flat;
the rented premises are not allowed for residential use or the tenancy is prohibited under any law or a government lease;
the taxpayer or his/her spouse has entered into a lease purchase agreement in respect of the premises concerned with the landlord;
the sum representing the domestic rent is allowable as a deduction under any other provision of the Inland Revenue Ordinance; or
the taxpayer or his/her spouse (who is not living apart from the taxpayer) has been allowed deduction for any other domestic rent paid in respect of any other domestic premises for the same period.
The amount of deduction allowable to a taxpayer is the amount of rent paid under the tenancy in relation to the YA or the deduction ceiling for the tenancy for the YA, whichever is less. If there is more than one tenant under the tenancy, the deduction ceiling will be reduced in proportion to the number of co-tenants. If the tenancy period covers less than 12 months of a YA, the deduction ceiling will be reduced in proportion to the tenancy period falling within the YA.
With ASEAN companies  increasingly seeking overseas listings, Hong Kong, one of the most renowned international financial centres in the world, has emerged as a popular locale for achieving such aim. Currently, 84  ASEAN-headquartered companies are listed on Hong Kong Stock Exchange (HKEX), representing a total market capitalisation of approximately US$15.3 billion  across a diverse portfolio. In terms of sectors , the listed ASEAN companies are primarily engaged in consumer discretionary, property / construction, information technology, and industrial businesses.
In addition to Hong Kong, the US and Singapore are also popular overseas listing destinations for ASEAN firms. Of the two, the New York Stock Exchange (NYSE) and Nasdaq are the preferred listing destination for larger ASEAN companies, especially those in the big tech sectors, while, on proximity grounds, the Singapore Stock Exchange (SGX) is more attractive to Malaysian companies. For its part, Hong Kong is the most appealing venue to ASEAN companies in general, with the largest number of ASEAN companies in a good variety of sectors and size when compared to other stock markets outside ASEAN. 
Hong Kong’s Appeal for ASEAN Companies Listing Overseas
In order to understand how Hong Kong can better serve ASEAN companies’ listing needs, HKTDC Research conducted a series of in-depth interviews with industry practitioners from October 2021 to January 2022. This led to the interviewees’ perception of Hong Kong as an overseas listing destination for ASEAN companies being summarised under the following five headings:
Good market breadth and depth resulting in better fund-raising
With a stronger IPO track record and more active secondary market, HKEX provides better fund-raising prospects for ASEAN companies than their local stock exchanges.
Efficiency and flexibility in funding overseas investment
Hong Kong’s strong talent pool and well-connected worldwide network facilitates efficient listings. Its robust legal system, along with the absence of both exchange and capital controls, are advantages that matter to ASEAN companies considering a listing.
Access to a larger and more diversified investor pool and as a doorstep to expansion in the GBA and the mainland China
Hong Kong’s huge international investor base, including both financial and strategic investors has a rich experience and strong interest in Asia and mainland China-related projects, and is seen by many ASEAN companies as a step on the ladder to further expansion within the Greater Bay Area (GBA) and elsewhereon the mainland China.
Proof of good governance helps improve corporate image
Listing on HKEX is a strong signal of an ability to maintain an international level of high-quality corporate governance.
Proximate time-zones with ASEAN countries provide extra convenience
Hong Kong is not only the most developed international financial centre near to ASEAN, but also shares the same or similar time-zones with ASEAN countries, adding convenience to company executives and investors.
Key Challenges for ASEAN Companies Seeking a Hong Kong Listing
Interviewees also highlighted several challenges that ASEAN companies may face when seeking a listing in Hong Kong:
Mainland China and GBA projects tend to draw more investor attention than other Asia projects
Despite this perception, with growing economic links between GBA and ASEAN, as well as the rising opportunities from the recently implemented RCEP, investor interest related to financial investment in ASEAN companies is expected to increase.
Some ASEAN companies perceive Hong Kong as focused on high-profile deals
Hong Kong generally welcomes companies of different sizes for listing, and is keen to list high quality companies. While some interviewees remarked that Hong Kong tends to focus on high-profile deals, others commented that ASEAN companies with smaller market capitalisation are also well-represented among companies listed on HKEX, due to its greater accessibility. New initiatives, such as the SPAC regime in Hong Kong, generally offer shorter timeframes and more flexibility for companies to list on HKEX, which may further facilitate ASEAN companies looking to list in Hong Kong.
During the course of the survey, many of the interviewees made recommendations as to how Hong Kong could better facilitate ASEAN companies’ funding needs and enhance its position as an overseas listing destination. Among the key recommendations were the following:
Strengthen promotion in ASEAN countries in order to address misconceptions and raise awareness among companies regarding the latest market environment and regulatory regimes in Hong Kong.
Target ASEAN companies in prevailing and emerging sectors: Asked to identify Hong Kong’s strengths, interviewees designated several particular sectors:
BioTech has been an economic development priority for many ASEAN economies, and the COVID-19 pandemic has drawn more investors’ attention to this sector. HKEX is an important hub for the listing of biotech and healthcare companies, and has introduced special concessions making it easier for pre-revenue biotech companies to list.
New economy and high tech are two of the fastest growing sectors in the ASEAN region, with a number of notable IPOs completed in recent years. Hong Kong’s streamlined regime for overseas listing, as well as its new SPAC regime, is seen as better able to facilitate ASEAN companies in the high-tech sectors.
FinTech prospers in many of the ASEAN countries amid the COVID-19 pandemic, unlocking new opportunities for financial institutions. Hong Kong’s new SPAC regime could provide a platform for ASEAN FinTech companies looking for fund raising and expansion.
Green sector: Global and ASEAN governments have set clear net zero targets, with many ASEAN companies now seeking funding for their green and ESG projects. With Hong Kong having established itself as Asia’s key green and sustainable finance hub, the city is considered well placed to respond to the rising need for ESG funding in the ASEAN region.
Consumer goods and services are fast growing sectors in ASEAN, benefiting from rising middle-income class and rising income. Some of the brands are ready for overseas expansion, and listing in Hong Kong could open the door to the mainland market.
Mining and commodities remain important sectors for ASEAN’s rich economies. Listing in Hong Kong could help them to access funding and expand their customer base in the mainland.
REIT listings in South-East Asia have undergone rapid growth in recent years. Consequently, Hong Kong’s recent moves to provide more listing incentives for REIT should have a strong appeal.
Hong Kong can enhance collaboration with ASEAN exchanges in order to promote dual primary / secondary listings: With RCEP having come into effect as of 1 January 2022, closer regional economic integration will drive the need for many projects to be funded throughout the bloc, particularly with regard to ASEAN companies’ projects on the mainland and vice versa. In such cases, Hong Kong is in an ideal position to serve as a platform for satisfying two-way funding needs. By working with ASEAN stock exchanges to facilitate ASEAN companies’ dual or secondary listings on HKEX, financial bodies will be better able to capitalise on the growing opportunities.
The extra chapter discussed the listing of Malaysian companies in Hong Kong. The HKEX has the largest number of Malaysian companies listing outside ASEAN, and is perceived as a prestigious destination among key stock exchanges. With further economic development in Malaysia, as well as economic integration in the region by RCEP, Hong Kong could satisfy Malaysian companies’ funding needs for regional expansion and mainland China investors’ interest in Malaysian companies, while Malaysia’s fast-growing IT sector and growth companies could be potential candidates for HKEX listing.
The COVID-19 pandemic has introduced new systems of interacting in the socioeconomic world which focus on digital methods to deliver products and services. This has additionally led to severe innovations in the digital finance space. In the pursuit of following appropriate social distancing protocols amidst repeated waves of infections and the resultant mobility restrictions, the country has witnessed an increasing adoption of several forms of cashless transaction methods, particularly Unified Payments Interface (UPI) or QR code-based merchant payments, across businesses and consumers. This has also led to a boost in real-time payments in the country.
The goal to make India a cashless economy is not new. The demonetisation drive of 2016 was primarily aimed at initiating the transition of the country to a cashless economy. However, owing to the lack of alternatives in cashless payment methods, individuals graduated towards app-based virtual wallets. This prompted a need for an intervention and in December 2016, the government launched the Unified Payments Interface (UPI), linking bank accounts to individuals’ smartphones directly for digital transactions. This platform, since then, have performed fairly well. In the first year, UPI registered an over 1000 per cent growth, albeit over a small base, and has grown in triple digits since. India accounted for the highest volume of real-time payments among businesses around the world, with over 40 per cent of all such payments made through 2021 originating in the country. It is thus has been best known to provide P2P and P2M transactions in India with ease, safety, and security and has successfully positioned itself as the world’s most successful real-time payments system. Furthermore, the government has also utilised the platform for direct benefit transfers to beneficiaries, including making payments to farmers directly in their bank accounts.
The country provides an appropriate template for mobile wallet integration with underlying real-time payment systems. Recounting the success of the digital payment mechanism, the Prime Minister said India’s share in real time digital payments world over is more than 40 per cent.
A recent report by NPCI reveals that the digital payments platform Unified Payments Interface (UPI) recorded 5.58 billion transactions in April 2022 alone, setting a new record for the payments platform in India since its inception in 2016. In April 2021, UPI processed only 2.64 billion transactions worth INR 4.93 trillion. To recall, UPI achieved its first milestone by recording over 1 billion transactions back in 2019. The report further mentioned that real-time payments in India are expected to grow at a compound annual growth rate of 33.5 per cent through 2026. Additionally, the report highlighted the value addition of real-time payments to India’s economic output. This stood at $ 16.4 billion or 0.56 per cent of the nation’s gross domestic product in 2021. By 2026, this contribution is tipped to rise to $ 45.9 billion – or 1.12 per cent of the nation’s GDP.
Major reasons driving this transition towards UPI and its scope of growth in India include cashback initiatives from companies like GooglePay, Paytm, and even WhatsApp. The government is also piloting initiatives like 123pay aiming to include feature phones in digital transaction models. And UPI Lite to further enhance the digital payments sector in the country. Furthermore, the Reserve Bank of India (RBI) has launched interoperable cardless ATM withdrawals utilising UPI platforms. This will enable the customers to benefit from transactions while safeguarding them from fraudulent actions.
The evident increase in the reliance on digital transactions has been instrumental in improving liquidity in financial systems of the country. For instance, workers and employees are paid quickly, allowing them to better plan their finances, businesses have more flexibility and reduce the need for heavy procedural cash flow management, among others. Moving forward, there is immense potential in this area for growth. Focussed efforts being laid on enhancing customer options for payment, enhancing security, undertaking innovations in technology like distributed ledger technology (DLT) and emerging tech like internet of things (IoT) can contribute extensively to further the scope of digital payments and smoothen the transition to a cashless economy. Moreover, the industry can enhance customer experience by focussing particularly on offline payments through UPI. Several regions in the country are still in the process of achieving continuous accessible internet. This would significantly contribute in countrywide acceptance and utilisation of the UPI, eventually leading to a less-cash and digitally empowered economy.
This is co-authored by Devika Chawla and Srijata Deb.
Foreign direct investment (FDI) inflows to India have been increasing year after year. In FY22, gross FDI inflows totaled $ 83.6 billion, up from $ 82 billion the previous year. In FY20, it was $ 74.4 billion. The services and industrial sectors received the majority of FDI in FY22, according to the RBI's monthly report.
India's total FDI is estimated to be over $ 570 billion. FDI investments usually consider a country's long-term potential and are rarely revoked. The high level of FDI suggests that India is a promising investment destination. IT, finance, FMCG, auto, medicines, telecom, and other emerging sectors like startups, critical technologies have immense potential in the growing Indian market. Such investments are often made by companies looking to form joint ventures or acquire shares in domestic businesses. They could be venture capital funds that help local entrepreneurs.
In 2021-22, FDI equity inflows into manufacturing sectors surged by 76% ($ 21.34 billion) over 2020-21. ($ 12.09 billion). Computer software and hardware drew the most inflows of all sectors. The services sector and the motor industry came next. In the context of the cooperative sector, a recent proposal to allow foreign direct investment (FDI), particularly in Primary Agricultural Cooperative Societies (PACS) with an aim to enhance infrastructure is also being pondered over. Consistent and high-quality FDI can help states expand their cooperative infrastructure, particularly the cold chain network, which is critical for storing, transporting, and preserving perishables, including fruits, vegetables, and dairy goods.
Over two-fifths of the 1,200 global business leaders polled in a survey in the United States, the United Kingdom, Japan, and Singapore said they plan to invest in India again or for the first time. Since the US Federal Reserve started cutting down its purchases of treasury bonds and mortgage-backed securities to boost the economy during the pandemic, FPIs have begun withdrawing. The Reserve Bank of India (RBI) liquidated dollars from reserves to slow the rupee's devaluation and reduce foreign exchange volatility, bringing reserves down to $ 596 billion at the end of May from a high of $ 642.453 billion on September 3 last year.
Several reforms by the central and state government authorities have been taken in the sectors of coal mining, contract manufacturing, digital media, single brand retail trading, civil aviation, defence, insurance, and telecommunications, among others. This has resulted in progressive implications. For instance, during the period 2021-2022, Karnataka received 53 per cent of FDI equity inflows in the domain of "Computer Software and Hardware," followed by Delhi (17 per cent) and Maharashtra (17 per cent).
The government analyses the FDI policy on a regular basis and makes significant changes from time to time to ensure that India remains an attractive and investor-friendly environment. Most sectors are open to FDI under the automatic route, and the government has developed a liberal and transparent FDI policy. Since 2014, FDI inflows have accelerated, with FDI increasing extensively since then. Singapore, the United States, and Mauritius are among the top FDI equity inflow countries.
Research highlights that the country is anticipated to attract a $ 100 billion FDI inflow in 2022-23, owing to several distinct ground level economic reforms and significant ease of doing business in recent years. It has further been suggested that such investment will be instrumental in aligning with the central government's strategy to strengthen the economic growth and achieve the target of becoming a $ 5 trillion economy in the coming years.
The need of the hour for India is to complement its record high FDI levels with focused efforts to accelerate infrastructure investments, inclusion of more sectors under the Production Linked Incentive scheme, increase in public investments in agriculture sector, addressing the high commodity prices and shortages of raw materials to firmly position itself as a lucrative investment destination.
This has been co-authored by Srijata Deb and Devika Chawla.
The historic India-UAE Comprehensive Economic Partnership Agreement (CEPA) which was signed between the two nations on 18 February 2022, officially entered into force today. Secretary, Department of Commerce, Shri BVR Subrahmanyam flagged off the first consignment of goods comprising of Jewellery products from India to UAE under the India-UAE CEPA at a function in New Customs House in New Delhi today.
In a symbolic gesture operationalizing the landmark Agreement, Shri B V R Subrahmanyam, Hon’ble Commerce Secretary to Government of India, handed over Certificates of Origin to three exporters from the Gems & Jewellery sector. The aforementioned consignment which will now attract zero customs duty under this Agreement is expected to reach Dubai today, 01 May 2022.
Gems & Jewellery sector contributes a substantial portion of India’s exports to the UAE and is a sector that is expected to benefit significantly from the tariff concessions obtained for Indian products under the India-UAE CEPA.
Overall, India will benefit from preferential market access provided by the UAE on over 97 % of its tariff lines which account for 99% of Indian exports to the UAE in value terms particularly from labour-intensive sectors such as Gems and Jewellery, Textiles, leather, footwear, sports goods, plastics, furniture, agricultural and wood products, engineering products, pharmaceuticals, medical devices, and Automobiles. As regards trade in services, Indian service providers will have enhanced access to around 111 sub-sectors from the 11 broad service sectors.
CEPA is expected to increase the total value of bilateral trade in goods to over US$100 billion and trade in services to over US$ 15 billion within five years.
Speaking at the ceremony, Commerce Secretary said it was a momentous occasion. Highlighting the immense potential for strategic partnership between the two nations, he said that the agreement is a trendsetter because of the short time in which it was negotiated.
He added that although the agreement had envisioned a target of USD 100 billion worth of trade, given the size of India's market and the access that UAE would give to India, much more could be achieved. Noting that the agreement was an outcome of the vision of the leaders of the two nations, the Commerce Secretary said that for India, UAE would be a gateway to the world.
Underscoring the need for India products to be competitive in the international market, the Secretary said that there was a need to build and augment our capacities. He also added that the government was working on reducing the logistics cost so that the products from hinterland could also be competitive.
The Commerce Secretary informed that India was negotiating trade agreements at a very fast pace with complementary economies and that talks were ongoing with UK, Canada and EU.
He also spoke of the need to communicate the benefits of such trade agreements to the exporter community in layman's language so that they understand the provisions of the agreement and make the best possible use of it. Highlighting the need for market intelligence and data analytics, which the government would be focusing on in future, the Secretary urged the exporters to take advantage of free trade agreements.
Stating that USD 670 bn of exports (goods and service) during last fiscal year constituted 22-23% of the GDP, Shri Subrahmanyam said that exports are an important engine of growth in every economy and added that the world was looking to India as a reliable partner.
Conveying a vision for India's future in 2047, the Secretary said that we would be a USD 40 trillion economy in the next 25 years. He asserted that the Department of Commerce has also been strengthening itself to be future ready and meet the challenges of tomorrow with focus on trade promotion.
Shri Santosh Kumar Sarangi, Director General of Foreign Trade; Shri Surjit Bhujbal, Chief Commissioner of Customs; Shri Sanjay Bansal, Commissioner of Customs; other senior officials from Department of Commerce; and representatives from Industry/Exporters Community and media fraternity witnessed this ceremony.
As a production location, Switzerland offers companies optimal conditions to optimize their manufacturing processes through increased efficiency and cost savings and to set up high-performance production facilities.
Thanks to its traditional watch, mechanical, electrical and metal as well as medtech industry, Switzerland has developed a highly industrialized precision cluster, now occupying a leading position in the field of advanced production processes (Industry 4.0). Characterized by particularly close cooperation between leading research centers and innovative industry, Switzerland offers international companies ideal conditions to optimize their manufacturing processes and to set up high-performance production facilities. The great availability of skilled technical staff due to the Swiss vocational system and a liberal labor law increase efficiency and productivity further. Switzerland is thus an excellent starting point for efficient supply chain management for the European market or for setting up highly automated production facilities.
Switzerland is particularly well positioned to address new challenges many companies face when it comes to keeping their supply chain intact. The alpine country has repeatedly proven strong and resilient amidst global crises. Here companies not only profit from a stable and low-risk environment but also from a brand that has been consistently linked to high quality, technological superiority and trust: “made in Switzerland.”
The Swiss Federal Council has decided to amend the reporting procedure for dividend withholding taxes. The reporting procedure applicable for dividend payments made within a group of companies will now be possible from a participation quota of 10% (currently 20%) and will be extended to all legal entities that hold such a qualified participation. The authorization to be obtained in international situations will be valid for 5 years instead of, currently, 3 years. The changes will enter into force on 1 January 2023.
The Federal Council decided on the amendments on 4 May 2022.
The Ministry of Finance (MoF) has launched a digital public consultation on the federal corporate income tax applicable to financial years beginning on or after 1 June 2023. The objective of the public consultation is to gather feedback from the business community and other interested stakeholders on the design and implementation of the UAE corporate tax regime.
The MOF's public consultation document covers the following aspects:
calculation of taxable income;
international Tax Developments; and
Public comments must be submitted online by 19 May 2022, using the public consultation on corporate tax submission link available here. Comments received after this date or not submitted via the prescribed online submission form will not be considered.
The public consultation on the federal corporate income tax was published on 28 April 2022 on the MoF's official website and is accessible here.
ABU DHABI, 9th May, 2022 (WAM) -- The UAE Cabinet, chaired by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, has adopted resolutions and incentives package to enhance the participation of Emirati talents in the private sector.
The resolutions come within NAFIS, the federal program that aims to increase the competitiveness of the Emirati workforce and to facilitate the private sector employment of UAE citizens.
The incentives include reducing the service fees of the Ministry of Human Resources and Emiratisation by 80 percent for private sector establishments, which accomplish major achievements in terms of recruitment and training of Emirati citizens.
The Cabinet approved increasing the Emiratisation rate to 2 percent annually from High-skilled jobs in establishments that employ 50 workers or more. The step aims at creating more than 12,000 job opportunities annually for citizens in all economic sectors.
Non-compliant companies will have to pay an amount of AED6,000 monthly, starting from January 2023, for every citizen who has not been employed.
Dr. Abdulrahman Al Awar, Minister of Human Resources and Emiratisation, said that the benefits offered by NAFIS support Emirati talents in the private sector.
Dr. Al Awar added that reducing 80 percent of the service fees of the Ministry for establishments that accomplish substantial achievements in terms of recruitment and training of Emirati citizens will further contribute to achieve NAFIS objectives.
Al Awar stressed that the new resolutions will increase the participation of Emirati talents in the private sector by creating more than 12 thousand jobs annually, with an annual increase of 10 percent for the 5 coming years.
Ghannam Al Mazrouei, Secretary-General of the Emirati Talent Competitiveness Council, said that NAFIS ensures the efficiency of the Emiratisation approach, while offering significant incentives to private sector establishments that achieve substantial milestones in terms of recruitment and training of Emirati citizens.
Al Mazrouei expected that private sector establishments will commit to the new resolutions and will increase Emiratisation by 2 percent for high-skilled jobs until achieving the 10 percent target by the 2026, stressing that private sector establishments will benefit from NAFIS.
NAFIS offers various benefits including the Emirati Salary Support Scheme where UAE citizens will be offered a one-year salary support of up to Dh8,000 per month during training and a monthly support of up to Dh5,000 will be paid for up to five years for university graduates.
The program provides UAE citizens specialised in fields such as coders, nurses and accountants with a top-up on their existing salaries.
The program also offers a subsidised five-year government-paid contribution on the company’s behalf against the cost of pension plans for Emirati staff and full support for the Emirati’s contribution across the first five years of their employment.
NAFIS also offers Private Sector Child Allowance Scheme. The scheme is monthly grant made to Emirati staff working in the private sector of up to Dh800 per child up to a maximum of Dh3,200 per month.
Data discussed in the meeting revealed that the total number of new Emiratis who joined the private sector since the launch of NAFIS in September 2021 till March 2022 amounted to 5,558, while the number of companies that hired new employees increased to 1,774.
The NAFIS data indicate that the number of citizens registered on the platform and eligible to benefit from the NAFIS initiatives reached 25,876, and that the number of job opportunities on the platform reached 2,524, while the number of beneficiaries increased to 4,074 people.
To fulfill its goals of boosting the competitiveness and efficiency of UAE citizens, NAFIS developed two bundles of initiatives as part of the "Projects of the 50". The first was released in September 2021, followed by the second in March 2022.
The first bundle included the "Emirati Salary Support Scheme", the "Merit Program", the "Pension Program", the "Child Allowance Scheme", the "Unemployment Benefit", and the "Job Offers Program".
The second bundle of initiatives was launched in March 2022, which focuses on training programs including the "Talent Program" to develop specialised vocational skills for Emiratis through internationally recognised certifications, and the "National Healthcare Program", which aims to upskill 10,000 UAE nationals in the field of nursing and healthcare via paid scholarships. The 'Apprentice Program,' which provides training and professional development opportunities in the private and semi-government sectors, and the 'Vocational Counseling Program,' which provides UAE nationals with access to career coaching and counseling services were also included in this package of initiatives.
DUBAI, 18th May, 2022 (WAM) -- The Arabian Travel Market (ATM) 2022 concluded last week having attracted more than 23,000 visitors from across the world at its first full-capacity event since the pandemic.
The four-day event, which doubled its visitors from last year, brought together 1,500 exhibitors and attendees from 150 countries, demonstrating Dubai’s growing reputation as the globe’s most open city in the post-pandemic world.
The city’s exceptional handling of the pandemic, its ability to provide one of the world’s safest environments and the gathering pace of its economic growth have made it a preferred international destination for business, tourism and events. The increasing confidence of global travelers in Dubai is borne out by the fact that key indicators in its tourism, hospitality and MICE sectors are now meeting and even exceeding pre-pandemic levels.
According to a report, Dubai welcomed almost four million international overnight visitors between January and March 2022, a massive 214 percent growth from last year, reaffirming its position as the first choice destination for global travellers. The city also ranked No.1 globally in hotel occupancy in the first quarter of 2022, with 82 percent.
Dubai International (DXB) continued to be the world's busiest airport by international passenger numbers for the eighth consecutive year, clocking 29.1 million in annual traffic in 2021. Dubai International also recorded its busiest quarter since 2020, with 13.6 million passengers shuttling through its gateway in the first quarter of 2022. Passenger traffic in the emirate’s airports surpassed the 10 million mark for the second consecutive quarter in Q1 2022. In March this year alone, Dubai International Airport saw 5.5 million visitors.
Popular family-friendly events in the last six months continued to raise Dubai’s profile as a major destination for culture, shopping, and entertainment. The 26th season of Global Village concluded recently with a record-breaking 7.8 million visitors. Its longest season ever, Global Village was open for 194 days, four more than its previous record. In addition, the ongoing Dubai Food Festival, and the 25th edition of Dubai Summer Surprises, the region’s biggest festival of its kind, are set to substantially increase tourist arrivals and strengthen Dubai’s appeal as a summer tourism hotspot.
With 12,000 restaurants and cafes, Dubai has also been steadily growing as a gastronomic hotspot. The city entices food-lovers with its world-renowned chefs, global restaurant brands, street food and home-grown restaurants inspired by the over 200 nationalities living in the emirate.
Earlier this year, Tripadvisor’s Travellers’ Choice 2022 report named Dubai as the world’s most popular travel destination. Furthermore, Dubai’s recent selection as the No.1 destination for ‘City Lovers’ and No. 4 destination for ‘Food Lovers’ in the Tripadvisor Travellers’ Choice Awards 2022 validate the city’s enduring appeal for global travellers.
In 2021, Dubai established itself as the world’s leading meetings, incentives, conferences and exhibitions (MICE) destination, hosting a number of events that put it at the heart of global conversations on the recovery of key sectors. According to Dubai’s Department of Economy and Tourism, the city has captured a total of 120 events for the year 2021 and beyond that are set to bring together a total of 70,000 opinion leaders, government officials and industry professionals.
Expo 2020 Dubai, the largest event in the history of World Expos, saw 192 participating countries coming together for ‘Connecting Minds, Creating the Future’ in a celebration of culture, innovation and science. The six-month mega global extravaganza attracted over 24 million visits by residents and global travellers. Other global events that helped drive international visitation included the Dubai World Cup, Binance Blockchain Week, Gulfood, Dubai International Boat Show, and the iconic Dubai Shopping Festival. This year’s World Government Summit in Dubai brought together more than 4,000 international participants, including top government officials to share ideas for building responsive governments that can deal with the challenges of the future.
In the last six months, Dubai also hosted major industry congresses and conferences including the Congress of the Société Internationale d'Urologie, Society of Petroleum Engineers Annual Technical Conference and Exhibition, International Astronautical Congress, World Chambers Congress and Gastech, bringing together industry leaders from all over the world.
Over the past year, Dubai’s sports sector emerged as a key driver of the city’s tourism recovery, attracting both players and fans from around the world and further enhancing Dubai’s position as a multi-faceted destination. Major winners and former champions headlined a star-studded field at the Dubai Desert Classic held at Emirates Golf Club in January this year. The world’s leading tennis stars participated in the Dubai Duty Free Tennis Championships (DDFTC) men’s tournament, which celebrated its 30th anniversary in February this year. In November last year, Dubai was also the venue for the majority of the matches and the final of the month-long ICC Men’s T20 Cricket World Cup, followed passionately by billions of cricket fans.
The past year also saw Dubai strengthening its status as one of the world’s top ranked health tourism destinations with 630,000 international health tourists, according to a report released by the Dubai Health Authority (DHA). Spending of international patients reached nearly AED730 million in the past year despite the global COVID-19 pandemic.
Dubai’s emergence as one of the most open destinations in the post-pandemic world reflects its ability to reinvent itself in an evolving global environment. The vast international diversity of its visitors also demonstrates Dubai’s growing status as a city that bridges global markets and cultures.
For goods supplied into Northern Ireland from outside the UK and EU, low value consignment relief will no longer apply and the seller will be liable to account for the VAT on the VAT return instead of at the border.
Business to business sales to UK VAT-registered customers
The seller will not need to charge and account for VAT if the customer gives them their VAT registration number. The seller can confirm it’s correct using the online service.
The seller can add a note to the invoice (for example, by writing ‘reverse charge: customer to account for VAT to HMRC’) then send it to the UK business customer.
The business customer will then be responsible for accounting for any VAT due on their VAT Return, if the goods are supplied in Great Britain — using a ‘reverse charge’ procedure.
Where goods are supplied in Northern Ireland the business customer will be responsible for accounting for any VAT due. They may account for it using postponed VAT accounting or any other means of paying import.
In both cases, the business customer will be able to recover the VAT as input tax on the same VAT Return under normal VAT recovery rules.
Sellers do not have to register for VAT if they only sell goods that are outside the UK at the point of sale to UK VAT-registered businesses.
Consignments valued at more than £135
Normal VAT and customs rules will apply on importation of the goods into Great Britain from outside the UK or into Northern Ireland from outside the UK and EU.
If you are an overseas seller who owns goods of any value that are located in the UK at the point of sale you must register and account for VAT on any sales you make directly to customers in Great Britain or Northern Ireland.
Five ways you can get financial support for your business
1. Claim up to £5,000 with the Employment Allowance
Employment Allowance is a tax relief which allows eligible businesses to reduce their National Insurance contributions (NICs) bills each year. You can claim this if you’re a business, and your employer Class 1 National Insurance liabilities were less than £100,000 in the previous tax year.
Last month we increased the Employment Allowance from £4,000 to £5,000 to further benefit SMEs.
That’s a new tax cut worth up to £1,000 for nearly half a million SMEs (30% of all businesses). This includes around 50,000 businesses which will be taken out of paying NICs and the Health and Social Care Levy entirely.
2. Get a discount of up to £5,000 on software, with Help to Grow
Help to Grow: Digital is a UK-wide government-backed scheme that aims to help you choose, buy and adopt digital technologies that will help you grow your business.
Eligible businesses can receive a 50% discount on buying new software worth up to £5,000 per SME, alongside free impartial advice and guidance about what digital technology is best suited to boost your business performance.
The Help to Grow: Management scheme provides small businesses with access to world-class business expertise on everything from leadership and financial management to marketing and digital adoption. This is delivered through leading UK business schools, alongside one-on-one support from a business mentor – and is 90% funded by the government.
By the end of the programme you will develop a business growth plan to help you lead and grow your business. Businesses which have previously taken part in the course – including James Lister & Sons, Wilkinson Construction Consultants Ltd and Seacat Services Ltd – strongly recommend the programme to anyone who is trying to grow their business.
To be eligible, you must be a UK-based SME, actively trading for at least one year and have a total of between 5 and 249 employees.
For more information and to apply, visit Help to Grow on GOV.UK.
3. Get up to half off your business rates
From April this year, small retail, hospitality, and leisure businesses can benefit from 50% off their business rates bills. This is worth £1.7 billion for up to 400,000 eligible properties.
The business rates multiplier has also been frozen for another year, saving businesses £4.6 billion over the next 5 years. This is used to calculate how much business rates they should pay, and it usually rises with inflation each year.
The business rates multipliers for 2022 to 2023 are 49.9 pence for the small business multiplier and 51.2 pence for the standard multiplier.
From April 2022 there will be no business rates due on a range of green technology, including solar panels and batteries, whilst eligible heat networks will also receive 100% relief. Together these will save businesses around £200 million over the next five years.
4.Invest in your business with Super-deduction and Annual Investment Allowance
To spur business investment, the super-deduction allows companies to cut their tax bill by 25 pence for every £1 they invest in any qualifying machinery and equipment. This can include the purchase of computers, most commercial vehicles and office furniture.
The temporary £1 million limit for the Annual Investment Allowance has also been extended to the end of March 2023. This had been due to revert to £200,000 at the start of 2022. The Annual Investment Allowance allows businesses to spend up to £1 million on qualifying business equipment, and deduct in-year its full cost before they calculate their taxable profits.
Both of these tax breaks remain available for firms to take advantage of until the end of March 2023, by incurring qualifying expenditure before then.
5. Benefit from the cut in Fuel Duty
The government has cut fuel duty on petrol and diesel by 5 pence per litre for 12 months – effective from 23 March 2022.
This cut, plus the freeze in fuel duty in 2022 to 2023, represents a £5 billion saving worth around:
£200 for the average van driver
£1,500 for the average haulier
To find out what other support may be available for your business, search 'business support' on GOV.UK.
The UK trade in numbers contains the latest published UK trade and investment statistics. It draws on a number of statistical sources including the Office for National Statistics (ONS), the Department for International Trade (DIT), and the United Nations Conference on Trade and Development (UNCTAD).
Trade statistics are derived from a number of sources and can be presented in different ways. The UK’s trade statistics are primarily provided by ONS releases including the ONS monthly UK trade, ONS UK quarterly trade by partner country, and ONS UK balance of payments. These releases set out the UK’s economic relationship with other countries and illustrate the UK’s bilateral trade on top exports and imports for goods and services.
In addition, the UK trade in numbers depicts foreign direct investment, regional trade statistics, and the UK’s position in global trade and investment rankings.
This latest publication of the UK trade in numbers includes data updates from:
ONS UK trade: March 2022 (published 12 May 2022)
ONS UK total trade: all countries October to December 2021 (published 28 April 2022)
The next published update to the UK trade in numbers will be 20 June 2022.
This will include data updates from:
ONS UK trade: April 2022 (due for release 13 June 2022)
UNCTAD World Investment Report 2022 (due for release 9 June 2022)
2. UK trade summary statistics
From January 2022, HMRC data collection methodology has changed for both EU goods imports and EU goods exports. The ONS have published an accompanying blog providing more detail on the changes. Caution should be taken when interpreting trade with the EU for periods that include January 2022 data.
2.1 Value of UK total trade in the 12 months to the end of March 2022
up 13.3% on the previous 12 months
Notes: estimates only cover registered businesses (for VAT and/or PAYE) in the GB (excludes Northern Ireland) non-financial business economy, which accounts for around two-thirds of the economy in terms of gross value added.
Response rates for 2019 data were impacted by the coronavirus (COVID-19) pandemic. Figures for 2019 should not be compared to figures from previous years.
Notes: Estimates only cover registered businesses (for VAT and/or PAYE) in the GB (excludes Northern Ireland) non-financial business economy, which accounts for around two-thirds of the economy in terms of gross value added.
Response rates for 2019 data were impacted by the coronavirus pandemic. Figures for 2019 should not be compared to figures from previous years.
Notes: figures in current prices, seasonally adjusted, on a balance of payments basis.
‘Other business services’ comprises professional and management consulting services including legal, accounting, management consulting, public relations, advertising, and market research; technical and trade-related business services including architectural, engineering, and scientific services; and research and development services.
Notes: figures in current prices, seasonally adjusted, on a balance of payments basis.
‘Other business services’ comprises professional and management consulting services including legal, accounting, management consulting, public relations, advertising, and market research; technical and trade-related business services including architectural, engineering, and scientific services; and research and development services.
Notes: figures are in current prices, on a balance of payments basis. Figures exclude non-monetary gold.
Trade data is allocated to each region by linking to data in the Inter-Departmental Business Register (IDBR) and then apportioning by employment count data.
6. Foreign direct investment statistics
The ONS have implemented several improvements to their FDI survey methodology for the 2020 release . Changes to stratification methods and sampling population increases have affected the results and led to an increase in reported FDI figures, particularly for inward FDI, in 2020.
As a result of these improvements, we advise caution when interpreting the 2020 results as some increases since 2019 may be due to the methodology changes.
Notes: figures are in current prices, on a directional basis.
FDI statistics are compiled on the basis of the immediate, rather than the ultimate, partner country. Pass-through investment often leads to an overstatement of investments in or from big financial centres, or countries offering favourable tax terms to investors, distorting the geographical distribution of FDI flows and FDI rankings.
Notes: figures are in current prices, on a directional basis.
FDI statistics are compiled on the basis of the immediate, rather than the ultimate, partner country. Pass-through investment often leads to an overstatement of investments in or from big financial centres, or countries offering favourable tax terms to investors, distorting the geographical distribution of FDI flows and FDI rankings.
6.7 Global ranking outward FDI stock
In 2020 the UK ranked
no change compared to 2019
The Government has concluded that it would be wrong to impose new administrative requirements on businesses who may pass-on the associated costs to consumers.
The remaining import controls on EU goods will no longer be introduced this year, the government has announced today.
Instead, traders will continue to move their goods from the European Union to Great Britain as they do now.
Russia’s illegal invasion of Ukraine, and the recent rise in global energy costs, have had a significant effect on supply chains that are still recovering from the pandemic.
The government has therefore concluded that it would be wrong to impose new administrative requirements on businesses who may pass-on the associated costs to consumers already facing pressures on their finances.
The change in approach is expected to save British importers at least £1 billion in annual costs.
The Government will now review how to implement these remaining controls in an improved way. The new Target Operating Model will be based on a better assessment of risk and will harness the power of data and technology. It will be published in the Autumn and the new controls regime will come into force at the end of 2023.
This process will build on existing work already taking place as part of the 2025 Border Strategy, including on the UK Single Trade Window – a new digital platform that will help traders to more easily move goods globally. Our goal is to create a seamless new ‘digital’ border, where technologies and real-time data will cut queues and smooth trade.
The controls introduced in January 2021 on the highest risk imports of animals, animal products, plants and plant products will continue to apply alongside the customs controls which have already been introduced.
Minister for Brexit Opportunities, Jacob Rees-Mogg said:
Today’s decision will allow British businesses to focus on their recovery from the pandemic, navigate global supply chain issues and ensure that new costs are not passed on to consumers.
It’s vital that we have the right import controls regime in place, so we’ll now be working with industry to review these remaining controls so that they best suit the UK’s own interests.
We want the process for importing goods from the EU to be safe, secure and efficient and we want to harness innovative new technologies to streamline processes and reduce frictions. It’s precisely because of Brexit that we’re able to build this UK-focussed system
The UK Government is committed to ensuring the process for importing goods remains safe, secure and efficient and will harness innovative new technologies to streamline future processes and reduce frictions.
Our engagement with industry will be guided by these objectives, and will build on existing work already taking place, including on the UK Single Trade Window – a new digital gateway that will help traders to more easily move goods globally.
John Keefe, Director of Public Affairs. Eurotunnel said:
Eurotunnel supports this decision which will keep goods flowing seamlessly into the UK. It is good for traders as it reduces import declaration paperwork on food and perishables.
It is good for transporters as it increases fluidity at the border and it is good for consumers as it keeps the cost of living down.
Michael Schymik, International Director of SEF Langdon’s said:
The current paper-based SPS processes and procedures are unsuitable in a 21st century digital world.
This change in policy towards a smarter digital border by the UK Government will allow the free flow of safe food products into Great Britain.
The decision may lead to a return of more EU companies exporting to the GB market, increasing competition and ultimately lowering prices for the consumer.
Notes to editors:
Controls no longer being introduced for EU goods July 2022 are:
A requirement for Sanitary and Phytosanitary (SPS) checks currently at destination to be moved to a Border Control Post (BCP)
A requirement for safety and security declarations on EU imports
A requirement for health certification for further SPS imports
A requirement for SPS goods to be presented at a BCP
Prohibitions and restrictions on the import of chilled meats from the EU
Strategy Provides Roadmap to Close Loopholes Exploited by Criminals and Illicit Actors
Recommendations Include Increasing Transparency, Leveraging Partnerships, and Addressing Technological Risks
WASHINGTON – Today, the U.S. Department of the Treasury issued the 2022 National Strategy for Combatting Terrorist and Other Illicit Financing (2022 Strategy), which identifies measures to increase transparency in the U.S. financial system and strengthen the U.S. anti-money laundering/counter the financing of terrorism (AML/CFT) framework. The 2022 Strategy, prepared pursuant to Sections 261 and 262 of the Countering America’s Adversaries Through Sanctions Act (CAATSA), addresses the key risks from the 2022 National Money Laundering, Terrorist Financing, and Proliferation Financing risk assessments and reflects the complex challenges posed by a world remade by the Covid-19 pandemic, the increasing digitization of financial services, and rising levels of corruption and fraud.
“Illicit finance is a major national security threat and nowhere is that more apparent than in Russia’s war against Ukraine, supported by decades of corruption by Russian elites,” said Assistant Secretary of the Treasury for Terrorist Financing and Financial Crimes Elizabeth Rosenberg. “We need to close loopholes, work efficiently with international partners, and leverage new technologies to tackle the risks posed by corruption, an increase in domestic violent extremism, and the abuse of virtual assets. Strengthening safeguards against money laundering and terrorist financing here in the U.S. will keep the international financial system strong.”
The 2022 risk assessments highlighted the illicit finance risk posed by the abuse of legal entities, the complicity of professionals that misuse their positions or businesses, small-sum funding of domestic violent extremism networks, the effective use of front and shell companies in proliferation finance, and the exploitation of the digital economy. The 2022 Strategy reflects the commitment of the Biden-Harris Administration to protect the U.S. financial system from the national security threats enabled by illicit finance, especially corruption.
To accomplish this, the 2022 Strategy identifies four priorities and fourteen supporting actions that will guide U.S. government efforts to effectively address the most significant illicit finance threats and risks to the U.S. financial system.
The four priority recommendations:
Close legal and regulatory gaps in the U.S. AML/CFT framework that illicit actors exploit to anonymously access the U.S. financial system through the use of shell companies and all-cash real estate purchases;
Continue to make the U.S. AML/CFT regulatory framework for financial institutions more efficient and effective by providing clear compliance guidance, sharing information appropriately, and fully funding supervision and enforcement;
Enhance the operational effectiveness of law enforcement, other U.S. government agencies, and international partnerships in combating illicit finance so illicit actors can’t find safe havens for their operations, and
Enable the benefits of technological innovation while mitigating risks, staying ahead of new avenues for abuse presented by virtual assets and other new financial products, services, and activities.
The 2022 Strategy identifies several avenues for taking action or continuing work already in progress, including legislative and regulatory action underway to enhance transparency in company formation and real estate purchases, applying AML/CFT requirements to previously uncovered financial institutions, professions, and sectors to fill gaps and reduce exemptions, clarifying the application of certain regulatory requirements to virtual asset activities, increased public awareness campaigns, more public-private partnerships to foster innovation, and collaboration with foreign partners on illicit finance issues.
The 2022 Strategy, along with the 2022 National Risk Assessments, will assist financial institutions in assessing the illicit finance risk exposure of their businesses and support the construction and maintenance of a risk-based approach to countering illicit finance for government agencies and policymakers. Treasury’s Office of Terrorist Financing and Financial Crimes prepared the 2022 Strategy, in consultation with office and bureaus in the Treasury Department, and the agencies, bureaus, and departments of the federal government that also have roles in combating illicit finance.
WASHINGTON — The Internal Revenue Service today announced that interest rates will increase for the calendar quarter beginning July 1, 2022. The rates will be:
5% for overpayments (4% in the case of a corporation).
2.5% for the portion of a corporate overpayment exceeding $10,000.
5% for underpayments.
7% for large corporate underpayments.
Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus three percentage points.
Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus three percentage points, and the overpayment rate is the federal short-term rate plus two percentage points. The rate for large corporate underpayments is the federal short-term rate plus five percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.
The interest rates announced today are computed from the federal short-term rate determined during April 2022 to take effect May 1, 2022, based on daily compounding.
Revenue Ruling 2022-11PDF announcing the rates of interest, is attached and will appear in Internal Revenue Bulletin 2022-23, dated June 6, 2022
Washington – The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for March 2022. The next release, which will report on data for April, is scheduled for June 15, 2022.
The sum total in March of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a net TIC inflow of $149.2 billion. Of this, net foreign private inflows were $172.4 billion, and net foreign official outflows were $23.3 billion.
Foreign residents increased their holdings of long-term U.S. securities in March; net purchases were $20.2 billion. Net purchases by private foreign investors were $29.4 billion, while net sales by foreign official institutions were $9.2 billion.
U.S. residents decreased their holdings of long-term foreign securities, with net sales of $2.8 billion.
Taking into account transactions in both foreign and U.S. securities, net foreign purchases of long-term securities were $23.1 billion. After including adjustments, such as estimates of unrecorded principal payments to foreigners on U.S. asset-backed securities, overall net foreign purchases of long-term securities are estimated to have been $1.8 billion in March.
Foreign residents decreased their holdings of U.S. Treasury bills by $16.4 billion. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities increased by $12.1 billion.
Banks’ own net dollar-denominated liabilities to foreign residents increased by $135.2 billion.
WASHINGTON — Today, the U.S. Department of the Treasury announced the first group of plans approved under the new round of the State Small Business Credit Initiative (SSBCI). The American Rescue Plan reauthorized and expanded SSBCI, which was originally established in 2010 and was highly successful in increasing access to capital for traditionally underserved small businesses and entrepreneurs. The new SSBCI builds on this successful model by providing nearly $10 billion to states, the District of Columbia, territories, and Tribal governments to increase access to capital and promote entrepreneurship, especially in traditionally underserved communities as they emerge from the pandemic. SSBCI funding is expected to catalyze up to $10 of private investment for every $1 of SSBCI capital funding, amplifying the effects of this funding and providing small business owners with the resources they need to sustainably grow and thrive. State governments submitted plans to Treasury for how they will use their SSBCI allocation to provide funding to small businesses, including through venture capital programs, loan participation programs, loan guarantee programs, collateral support programs, and capital access programs.
“This historic investment will help reduce the barriers that prevent small businesses and entrepreneurs from getting their ideas off the ground, building successful businesses, and creating jobs, especially in traditionally underserved communities where these opportunities are needed most,” said Deputy Secretary of the Treasury Wally Adeyemo. “Treasury is encouraged by these plans and their support for key industries, including manufacturing and the environmental sector.”
A White House report released earlier this month found that more Americans are starting new businesses than ever before. In 2021, Americans applied to start 5.4 million new businesses – 20 percent more than any other year on record. It also found that small businesses are creating more jobs than ever before, with businesses with fewer than 50 workers creating 1.9 million jobs in the first three quarters of 2021 – the highest rate of small business job creation ever recorded in a single year. The investments being made through SSBCI are a key part of the Biden Administration’s strategy to keep this small business boom going by expanding access to capital and by providing entrepreneurs the resources they need to succeed. The work Treasury has done through the implementation process to ensure SSBCI funds reach traditionally underserved small businesses and entrepreneurs will also be critical to ensuring the small business boom not only continues but also lifts up communities disproportionately impacted by the pandemic.
Today, Treasury is also announcing that it will have specialized programming to enable jurisdictions to share best practices for targeting investments in key industries and businesses owned by underserved entrepreneurs. Treasury strongly encourages jurisdictions to implement their plans in ways that support industries especially important to the U.S. economy – including small businesses that promote American manufacturing, strengthen critical supply chains, and invest in clean energy and renewables to secure our nation’s energy independence. Treasury has structured SSBCI to ensure that these funds will reach underserved small businesses and entrepreneurs in need of access to capital, including by providing $1 billion in incentive funds for jurisdictions that successfully reach underserved entrepreneurs and through its recent announcement of plans to deploy $300 million in technical assistance to reach businesses and entrepreneurs in need of assistance, including through the transfer of funds to the Minority Business Development Agency. Treasury continues to strongly encourage recipients to reach small businesses that provide jobs that pay a living wage, which will help American workers emerge stronger from the pandemic.
The first recipients under the SSBCI program plan to target key industries and small businesses in need of access to capital. Treasury intends to continue approving plans on a rolling basis. The following descriptions highlight some of the programs that Treasury has approved for these states.
Hawaii, approved for up to $62,021,957, will launch new loan participation and credit enhancement programs, including HI-CAP Loans and HI-CAP Collateral, with two-thirds of its allocation. These programs will expand access to capital for underserved communities by lending to projects that will diversify Hawaii’s economy and lessen its reliance on tourism, which incurred high rates of business failures and unemployment during the COVID-19 pandemic. Hawaii will also operate a venture capital program, the HI-CAP Invest program, which will include investments in impact funds that target early-stage businesses focused on social or environmental change in Hawaii.
Kansas, approved for up to $69,596,847, will operate a loan participation program, the GROWKS Loan Fund, and an equity program, the GROWKS Angel Capital Support Program, with over 80 percent of its funds. These programs will expand access to capital for underserved communities by providing companion loans and equity investments with varying levels of SSBCI support. Kansas estimates that approximately 40 percent of businesses supported will be women-owned and 20 percent will be minority-owned small businesses.
Maryland, approved for up to $198,404,958, will operate eight loan and equity investment programs through Maryland Department of Housing and Community Development (DHCD), Maryland Department of Commerce and Maryland Technology Economic Development Corporation. Among the approved programs is the Maryland Small Business Development Financing Authority (MSBDFA), a program at the Department of Commerce, which will expand access to capital for underserved communities by targeting loans to underserved businesses. Maryland anticipates that 70 percent of new loans in the SSBCI-funded program will be provided to minority-owned businesses and 40 percent to women-owned businesses. Maryland will also use $17 million to fund the Neighborhood Business Works Venture Debt Program, which will expand access to capital for underserved communities by lending alongside venture capital equity in high-growth businesses located in qualified low-income communities, anchoring the businesses in these communities through federal tax incentives that require them to remain in low-income communities for several years.
Michigan, approved for up to $236,990,950, has been an innovator in developing credit support programs given the challenges of the manufacturing sector there for the last several decades. Michigan’s top industry assisted in the previous iteration of SSBCI, in both lending and venture capital, was manufacturing. With these funds, the state will operate the Michigan Business Growth Fund Collateral Support Program with nearly one-third of its allocation. This existing program provides cash collateral accounts to lending institutions to enhance the collateral coverage of borrowers so that they qualify for loans. Historically the program has targeted industries with high wages and high job growth potential, such as manufacturing, medical device technology, engineering, and agribusiness. Michigan will expand the program to reach smaller service and retail businesses disproportionately hurt by COVID-19.
West Virginia, approved for up to $72,104,798, will operate a seed capital co-investment fund with more than half of its allocation, increasing small businesses’ access to venture capital in a state with no resident venture capital firms and average annual venture capital investment well below the per-capita national average. The fund will focus on expanding access to capital for underserved communities by providing equity investments matched with private equity from angel investors or venture capital funds. Statewide and regional nonprofits and community development financial institutions (CDFIs) will partner with community banks and CDFIs to use the remaining balance of the funds for two loan programs that will serve the needs of West Virginia businesses.