- Biden’s New Tax Proposal
- EU and UK Agree on Fishing Quotas for 2021
- Interest Rates Remained Unchanged in India
Biden’s New Tax Proposal
US President Joe Biden made an important concession to find support for the infrastructure package and proposed to the Republicans to impose a minimum corporate tax rate of 15%. Biden offered to drop plans to raise corporate tax rates as high as 28% and instead set a minimum 15% tax rate aimed at ensuring all companies pay taxes, sources said.
Republicans had been skeptical of the White House’s earlier proposal to raise the corporate tax rate from 21% to 28% to fund Biden’s $1.7 trillion infrastructure plan.
Asked Thursday about the president’s position, White House press secretary Jen Psaki said Biden has “absolutely not” wavered in his belief that Congress should raise the corporate tax rate, adding it is a critical way to “pay for a range of the bold proposals that he has put forward.”
“But he also took a look at these proposals, and … all of the tax proposals that he has put forward over time, to find a way where there should be pay-fors that based on their bottom lines, many of the Republican negotiators should be able to agree to,” Psaki added.
After US President Biden’s new tax proposal, attention turned to the G-7 finance ministers summit, which will be held in London on June 4-5.
French Finance Minister Bruno Le Maire has called for an agreement on global corporate tax and digital tax.
The team of US Treasury Secretary Janet Yellen, who will attend the meeting, points to July for the agreement.
EU and UK Agree on Fishing Quotas for 2021
In the statement made by the EU Commission, it was announced that an agreement was reached between the UK and the EU in the negotiations on fishing quotas for 2021.
“This agreement provides predictability and continuity for our fleets with definitive total allowable catches for the remainder of the year,” said Fisheries Commissioner, Virginijus Sinkevičius in a statement.
The agreement establishes the total allowable catches (TAC) for 75 shared fish stocks for 2021, as well as for some deep-sea stocks for 2021 and 2022. It also provides clarity on access limits for non-quota species, the European Commission added in a statement.
Fishing was one of the most difficult topics in the Brexit negotiations between the EU and the UK. Under the new Trade and Cooperation Agreement, 25% of the previous EU quota in UK waters will be transferred to the UK between now and June 2026, with specific percentages of annual TACs agreed for each fishing stock. Mutual access to each other’s waters is now granted via a licencing system for fishing vessels.
Besides, a new conflict between the UK and France arose earlier this month over French fishing boats’ access to waters surrounding the Channel Island of Jersey, with French vessels protesting that the permits handed to them included requirements that were not contained in the trade agreement.
The dispute is still ongoing, with French Foreign Minister Jean–Yves Le Drian addressing regional fishing chiefs, saying, “We cannot accept these new maneuvers and we will continue to protect the rights of our fishermen.”
Interest Rates Remained Unchanged in India
The epicenter of the pandemic in India, the central bank kept the policy rate constant, while lowering its growth expectations.
The Reserve Bank of India did not change the interest rate in its sixth consecutive meeting and kept the policy rate unchanged at 4%.
The expectation of economists participating in the Bloomberg survey was that there would be no change in interest rates.
The Reserve Bank of India, which kept the interest rate constant, revised its forecast for the country’s growth downwards. The bank predicted that the economy struggling with the virus will grow by 9.5%. Previously, this expectation was set at 10.5%.
Announcing that the decision was taken unanimously, Reserve Bank of India Chairman Shaktikanta Das pointed out that the supportive stance will continue in order to combat the economic effects of Covid 19 and to advance the economic recovery on a permanent basis.
“On growth, the central bank reduced its GDP forecast by 100 bps to 9.5%, due to increased spread of Covid-19, lockdowns, and moderation in many high-frequency sentiment measures. The RBI also raised its inflation projections slightly on account of upside risks emanating from the second wave, ‘’ noted Shashank Mendiratta, Economist at IBM, New Delhi.
“However, given the current level of output gap and demand-side consideration in the economy, we do not anticipate any change in current policy settings for the rest of 2021. At the same time, we expect the central bank to continue to focus on liquidity measures to mitigate the impact of the pandemic,” he added.