A $1.2 trillion infrastructure package that is a top priority for US President Joe Biden passed the Senate on Tuesday, marking a much-needed win for the White House and the bipartisan group of senators who spent months negotiating it.
The package, described by the White House as “historic”, only needed a simple majority to pass and received the rare backing of several Republicans.
"We're on the cusp of an infrastructure decade that I truly believe will transform America," Mr Biden said in remarks from the White House on Tuesday afternoon.
The bill's 69-30 tally provides momentum for this first phase of Mr Biden’s “Build Back Better” priorities, now headed to the House of Representatives.
"Today we moved one step closer to making a once-in-a-generation investment in our infrastructure," Vice President Kamala Harris said.
A sizeable number of politicians showed they were willing to set aside partisan pressures, eager to send billions to their states for rebuilding roads, high-speed internet, water pipes and the public works systems that underpin much of American life.
"This bill shows that we can work together," Mr Biden said of the rare bipartisanship that occurred to get this bill passed in the Senate.
“Today we proved that democracy can still work," he said.
While the bill is popular among many members of Congress, it faces new challenges when it goes to the House amid tension within the majority-holding Democratic Party, some of whose progressive members say it does not go far enough.
Democrats hope to have more of their priorities approved through a separate, $3.5tn package. It only requires 50 votes and includes money for childcare, elder care and other programmes, though it is much more partisan and expected to draw only Democratic support.
Infrastructure was once a mainstay of lawmaking, but the weeks-long slog to strike a compromise showed how hard it has become for Congress to tackle routine legislating, even on shared priorities.
“There’s been detours and everything else, but this will do a whole lot of good for America,” Senate Majority Leader Chuck Schumer said.
Mr Biden welcomed the Senate's approval of the bill and urged the House to follow suit.
“I hope Congress will send it to my desk as soon as possible so we can continue our work of building back better,” he said.
Mr Biden has come under increasing pressure in recent weeks over a wide range of issues, including a surge in coronavirus cases driven by the Delta variant, mixed messaging on mask use and an increase in migrants heading to the US-Mexico border.
The measure proposes about $550 billion in new spending over five years in addition to current federal authorisations for public works that will reach virtually every corner of the country — a potentially historic expenditure Mr Biden has put on par with the building of the transcontinental railway or the interstate motorway system.
There is money to rebuild roads and bridges, and also to shore up coastlines against climate change, protect public utility systems from cyber attacks and modernise the electrical grid. Public transit would receive a boost, as would airports and freight rail. Most lead drinking water pipes in America could also be replaced.
While liberal members of Congress said the package does not go far enough as a down-payment on Mr Biden’s priorities and conservatives said it is too costly, the coalition of centrist senators was able to hold. Even broadsides from former president Donald Trump could not bring the bill down.
“This infrastructure bill is not the perfect bill,” said Lisa Murkowski, a Republican senator from Alaska, one of the negotiators.
She said the senators kept at it, believing “it’s better to get some of what our constituents want rather than none of it".
News agencies contributed to this report
THE BIO:
Sabri Razouk, 74
Athlete and fitness trainer
Married, father of six
Favourite exercise: Bench press
Must-eat weekly meal: Steak with beans, carrots, broccoli, crust and corn
Power drink: A glass of yoghurt
Role model: Any good man
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
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
The alternatives
• Founded in 2014, Telr is a payment aggregator and gateway with an office in Silicon Oasis. It’s e-commerce entry plan costs Dh349 monthly (plus VAT). QR codes direct customers to an online payment page and merchants can generate payments through messaging apps.
• Business Bay’s Pallapay claims 40,000-plus active merchants who can invoice customers and receive payment by card. Fees range from 1.99 per cent plus Dh1 per transaction depending on payment method and location, such as online or via UAE mobile.
• Tap started in May 2013 in Kuwait, allowing Middle East businesses to bill, accept, receive and make payments online “easier, faster and smoother” via goSell and goCollect. It supports more than 10,000 merchants. Monthly fees range from US$65-100, plus card charges of 2.75-3.75 per cent and Dh1.2 per sale.
• 2checkout’s “all-in-one payment gateway and merchant account” accepts payments in 200-plus markets for 2.4-3.9 per cent, plus a Dh1.2-Dh1.8 currency conversion charge. The US provider processes online shop and mobile transactions and has 17,000-plus active digital commerce users.
• PayPal is probably the best-known online goods payment method - usually used for eBay purchases - but can be used to receive funds, providing everyone’s signed up. Costs from 2.9 per cent plus Dh1.2 per transaction.
Our Time Has Come
Alyssa Ayres, Oxford University Press
Company profile
Company: Rent Your Wardrobe
Date started: May 2021
Founder: Mamta Arora
Based: Dubai
Sector: Clothes rental subscription
Stage: Bootstrapped, self-funded
Who was Alfred Nobel?
The Nobel Prize was created by wealthy Swedish chemist and entrepreneur Alfred Nobel.
- In his will he dictated that the bulk of his estate should be used to fund "prizes to those who, during the preceding year, have conferred the greatest benefit to humankind".
- Nobel is best known as the inventor of dynamite, but also wrote poetry and drama and could speak Russian, French, English and German by the age of 17. The five original prize categories reflect the interests closest to his heart.
- Nobel died in 1896 but it took until 1901, following a legal battle over his will, before the first prizes were awarded.
COMPANY PROFILE
Name: Xpanceo
Started: 2018
Founders: Roman Axelrod, Valentyn Volkov
Based: Dubai, UAE
Industry: Smart contact lenses, augmented/virtual reality
Funding: $40 million
Investor: Opportunity Venture (Asia)
