Lack of school places requires urgent action


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Two thousand eight hundred. That's how many young minds came up short in a one-day lottery for school spaces at an Indian school in Abu Dhabi at the weekend. With about 3,000 applicants for 200 seats, the majority of parents and their children will now have to scramble, plead or wait until next year for their children to go to school.

There are many more children in the same fix.

Education should never depend on luck. And yet, in Abu Dhabi today the luck of the draw is presenting parents with this nightmare calculus: win, skip a year or send their children home to live with relatives?

Parents will make great sacrifices to ensure their children have an education, from securing loans to taking second jobs. It stands to reason, then, that if the school crisis were a problem parents could solve alone, they would. But it's not, and they can't.

Demographics are one reason. Because many families live on limited incomes, they don't have the means to secure spaces at top schools, where tuition can cost many thousands of dirhams. That leaves other options like villa schools and smaller establishments that have long catered for lower-income families.

But in 2008, the Abu Dhabi Education Council started ordering these schools closed for health and safety reasons. A shortage in school places has since become a crisis. A well-meaning policy designed to protect children may have done more harm than good.

For pupils in the Indian curriculum in particular, the schooling crisis is expected to ease somewhat in the 2013 school year, when an additional 10,000 seats become available. That does not mean, however, that 2012 can be written off. Rather than just shutter schools, the Government should allocate land and facilitate temporary mobile classrooms to provide children a place to learn.

Officials must remember that working families make up a large segment of the nation's workforce. They will do what they must for their children, even if that means going home.

In the end, any long-term solution will have to come by way of the private sector, through the creation of charity schools, non-profit institutions or in other low-cost options. These are solutions that have been effective in other countries. But such an overhaul of the capital's education system will take money and time. Those are two luxuries that thousands of families do not have this year.

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Points to remember
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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