Analysis: Morningstar DBRS Just a day to the UK general election on 4th July and a change in government looks imminent. The Labour party has continued to lead in the voting intention polls and if polls prove right, Labour will form the next government. After 14 years of a Conservative-led government, a change to Labour … Read more
The U.S. government faces fiscal challenges that will require higher taxes, regardless of the presidential election outcome. The federal deficit is projected to grow to 6% of GDP by 2033, and debt held by the public will increase to 114% of GDP. The 2017 Tax Cut and Jobs Act simplified and cut individual income taxes and lowered business taxes, with most individual tax cuts expiring in 2025. President Biden’s proposed budget includes repealing benefits for high-income families and raising taxes on the wealthy. If former President Trump is reelected, the TCJA is likely to be extended, costing at least .3 trillion through 2033. Trump has proposed tariffs on imports from China and lowering the federal corporate tax rate. These proposals could lead to a financial “train wreck” for the nation.
Oil prices are trading down due to disappointing economic data and a rise in US crude oil inventories.
A Russian missile attack targeted power facilities in Ukraine, causing damage and fires. Ukrainian air defenses were able to intercept some of the incoming missiles. The attacks have led to a significant loss of power generation capacity in Ukraine. The United States approved a major aid package for Ukraine, including new weapons for air defense systems.
– The 2023 budget proposed a refundable ITC for clean electricity, equal to 15% of the capital cost of eligible property.
– The 2024 budget provides the design and implementation details of the ITC, including the eligibility criteria.
– The ITC will be available only to eligible Canadian corporations, including taxable Canadian corporations, provincial and territorial Crown corporations, and corporations owned by municipalities or Indigenous communities.
– Property eligible for the ITC includes equipment used to generate electricity from various sources, including solar, wind, water, nuclear fission, geothermal energy, and specified waste materials.
– The ITC will be subject to potential repayment obligations if the property is converted to an ineligible use, exported from Canada, or disposed of.
– The EV Supply Chain Investment Tax Credit is equal to 10% of the cost of buildings used in electric vehicle supply chain segments.
– The Clean Technology Manufacturing Investment Tax Credit has been updated to include production of qualifying minerals at polymetallic projects.
– An accelerated CCA of 10% is provided for new eligible purpose-built rental projects that begin construction after April 15, 2024.
– Immediate expensing is provided for certain productivity-enhancing assets acquired after April 15, 2024.
– The budget proposes to extend an exemption for certain interest and financing expenses relating to arm’s length financing used to build or acquire purpose-built rental housing.
– The government is considering introducing a new tax on residentially zoned vacant land to spur development.
– The government intends to restrict the acquisition of existing single-family homes by very large corporate investors.
– The government is exploring measures to expand access to alternative financing products for home purchasers, such as halal mortgages.
– Amendments are proposed to the CRA’s information gathering provisions to enhance tax audits and facilitate the collection of tax revenues.
– The budget proposes to remove the tax-indifferent investor exception to the anti-avoidance rule for synthetic equity arrangements.
– Specific amendments are proposed to preclude a corporation from qualifying as a mutual fund corporation if it is controlled by or for the benefit of a corporate group.
– The budget introduces the Canada Carbon Rebate for Small Business, to return a portion of the federal backstop pollution pricing fuel charge proceeds collected from a province to CCPCs with less than 500 employees.
– The budget proposes measures to address tax debt avoidance planning, including joint and several liability for taxpayers who participate in such planning.
– The budget proposes to remove the failure to file an information return in respect of a reportable or notifiable transaction under the mandatory disclosure rules from the general penalty provision.
– The budget proposes to repeal the exception to the debt forgiveness rules for bankrupt corporations and the loss restriction rule applicable to bankrupt corporations.
– The government launched consultations on the existing SR&ED tax incentives and announces a second phase of consultations to focus on specific policy parameters.
A lack of air defense missiles prevented Ukraine from stopping a Russian missile attack that destroyed the largest power plant near Kyiv. President Zelenskiy mentioned that they ran out of missiles to defend the plant, which was hit by four of the 11 missiles that were launched. The power plant had a capacity of 1,800 megawatts and its destruction has led to a power shortage in the region. Russia has been targeting Ukraine’s energy system with missile and drone strikes, causing significant damage to power generating capacity. Despite Ukraine’s urgent calls for additional air defense systems, Western allies have been hesitant to provide more support.
The situation on the eastern front in Ukraine has worsened, with Russia intensifying its armoured assaults and battles for control of a village near Bakhmut. Vital U.S. military aid expected by Kyiv remains stuck in Congress. Colonel General Oleksandr Syrskyi stated that Russian forces were taking losses but also making tactical gains. Ukraine’s military is facing challenges and is calling for better training for soldiers. Ukraine’s parliament passed a bill to overhaul how civilians are drafted into the armed forces, with the draft age lowered to 25.
Marios Tannousis is the CEO of Invest Cyprus, focusing on attracting and facilitating Foreign Direct Investment (FDI) in Cyprus. Cyprus has committed to spending €500 million by 2026 to combat climate change and foster the green transition. Cyprus aims to become the best place in Europe to live, work, and do business by transitioning towards a renewable energy system and implementing Environmental, Social, and Governance (ESG) criteria. The country is strategically positioned to help combat climate change in the Middle East and North Africa regions. Cyprus is working towards becoming a leader in sustainability and developing a circular zero-waste economy.
A Russian drone attack in Kharkiv, Ukraine killed four people and left 350,000 residents without power. The attack damaged residential buildings, a medical facility, and cars. Governor Oleh Synehubov reported three rescue workers were killed in a repeat strike. Ukraine’s military shot down 11 drones out of 20 launched at the country. Russia also targeted a solar power plant in Dnipropetrovsk region. Kharkiv has been a frequent target of Russian attacks, with recent incidents including an aerial bomb killing one person and a missile attack killing five.
President Volodymyr Zelenskiy urged the U.S. House of Representatives to pass a new military aid package for Ukraine quickly. Republican Speaker Mike Johnson has delayed a bill that would provide billion in military and financial aid for Ukraine. Ukrainian troops are facing shortages of artillery supplies as aid is held up in Congress.