Israel's Iron Dome anti-missile system intercepts rockets launched from the Gaza Strip, as seen from Ashkelon, in southern Israel, on October 20. Reuters
Israel's Iron Dome anti-missile system intercepts rockets launched from the Gaza Strip, as seen from Ashkelon, in southern Israel, on October 20. Reuters
Israel's Iron Dome anti-missile system intercepts rockets launched from the Gaza Strip, as seen from Ashkelon, in southern Israel, on October 20. Reuters
Israel's Iron Dome anti-missile system intercepts rockets launched from the Gaza Strip, as seen from Ashkelon, in southern Israel, on October 20. Reuters

World

US

Republicans look to fund Iron Dome in $14.3bn Israel aid package

White House says paying for proposal by offsetting costs elsewhere is a 'non-starter'

Kyle Fitzgerald
Kyle Fitzgerald
Washington

October 30, 2023

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Republicans in the US House of Representatives on Monday released the details of their $14.3 billion Israeli aid package, with money for the country's present and future defence systems.

The proposal is in line with the $14.3 billion in funding for Israel that President Joe Biden had requested, although it would not be part of his larger $105 billion request.

Included in House Speaker Mike Johnson's proposal is $4.4 billion for Israel's Iron Dome and David Sling defence systems.

Another $1.2 billion would be used to help Israel develop its Iron Beam defence system against short-range rocket threats.

The Defence Department would also receive $4.4 billion to replenish stocks that the Pentagon has already given to support Israel since October 7.

But the bill's passage is far from certain and will be the first major test for Mr Johnson since coming to power.

The Republicans' proposal would be paid for by offsetting costs for Mr Biden's Inflation Reduction Act, something that typically does not happen in emergency funding requests.

White House Press Secretary Karine Jean-Pierre said rescinding those costs is a "non-starter".

"Playing political games that threaten the source of funding for Israel’s self-defence - now and into the future - would set an unacceptable precedent that calls our commitment to one of our closest allies into question," she said in a statement.

It decouples Israeli aid from assistance that would go to Ukraine and Taiwan. Mr Biden requested funding for all three as part of his broader emergency funding request.

"There is strong bipartisan agreement that it is in our direct national security interest to help Ukraine defend its sovereignty against appalling crimes being committed by Russian forces against thousands of innocent civilians," Ms Jean-Pierre said.

Senate Majority Leader Chuck Schumer said separating Ukraine from Israel – as well as rescinding funds from Mr Biden's programme – would make it “much harder to pass”.

Defence Secretary Lloyd Austin and Secretary of State Antony Blinken were scheduled to testify before a senate committee on Mr Biden's funding request on Tuesday.

Mr Biden's administration has maintained its unequivocal backing of Israel's defence since the deadly Hamas assault three weeks ago killed about 1,400 people.

But as Israel has bombed Gaza over the past three weeks, resulting in more than 8,000 deaths, the White House has sought to make a finer point that it must act within the laws of war and be more conscious of civilian safety.

The US also said it had pressed Israel to restore communication channels to Gaza over the weekend and that it was “pleased” when the internet was restored.

Mr Biden has also pressed for more humanitarian aid be delivered to Gaza at a quicker pace. The US said 45 lorries carrying humanitarian assistance entered Gaza on Sunday, a number that must significantly increase.

He announced earlier in October that Washington would provide $100 million in humanitarian assistance for Gaza.

Mohammed bin Zayed Majlis

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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While you're here

England's all-time record goalscorers:
Wayne Rooney 53
Bobby Charlton 49
Gary Lineker 48
Jimmy Greaves 44
Michael Owen 40
Tom Finney 30
Nat Lofthouse 30
Alan Shearer 30
Viv Woodward 29
Frank Lampard 29

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

Red flags
  • Promises of high, fixed or 'guaranteed' returns.
  • Unregulated structured products or complex investments often used to bypass traditional safeguards.
  • Lack of clear information, vague language, no access to audited financials.
  • Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
  • Hard-selling tactics - creating urgency, offering 'exclusive' deals.

Courtesy: Carol Glynn, founder of Conscious Finance Coaching

Updated: October 30, 2023, 10:10 PM
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