Buffalo cool off in scarce Iraqi waters that have turned into pools of sewage due to pollution and desertification. EPA
Buffalo cool off in scarce Iraqi waters that have turned into pools of sewage due to pollution and desertification. EPA
Buffalo cool off in scarce Iraqi waters that have turned into pools of sewage due to pollution and desertification. EPA
Buffalo cool off in scarce Iraqi waters that have turned into pools of sewage due to pollution and desertification. EPA

Climate change could add to Middle East water scarcity


Tim Stickings
  • English
  • Arabic

Fragile water supplies in the Middle East are under further threat from climate change, officials from the region said on Tuesday.

Talks in Sweden heard that access to clean water in the region was a “pressing challenge of our times”.

Rising temperatures could reduce Iraq’s available freshwater by as much as a fifth, according to one official. There are also fears of “severe health risks” in Palestinian territory.

The concerns were raised during World Water Week in Stockholm, one of the events paving the way for the Cop28 summit in the UAE. One day of talks in Dubai will be dedicated to food, agriculture and water.

Shahira Wahbi, an Arab League official responsible for housing and water resources, said problems such as water scarcity, pollution and poor sanitation are “all related to the effect” of climate change.

She said ensuring access to clean water in the Middle East and North Africa was “one of the most pressing challenges of our time… especially in the face of climate change and water scarcity”.

“We all know that water is a fundamental human right and its sustainable management is crucial for the well-being and prosperity of communities across the world, and this region is no exception,” she said.

Omar Salih, an engineer at Iraq’s Ministry of Construction, Housing and Public Municipalities, said water scarcity was increasing due to lacking regulation and poor infrastructure.

His presentation said climate change “will further exacerbate the situation” because of forecasts that precipitation will fall 10 per cent by 2050 – leading to a 20 per cent drop in available freshwater in Iraq.

Palestinian children play by a puddle in the Israeli-occupied West Bank. Reuters
Palestinian children play by a puddle in the Israeli-occupied West Bank. Reuters

The problem is compounded by deteriorating water quality due to pollution, Mr Salih told delegates, but Iraq could make “great strides” if it improves environmental regulations.

“Iraq has great potential in water resources and if we continue to work in this regard we will improve our systems,” he said.

Elsewhere, climate hazards could force Palestinians to switch to alternative water supplies that carry “severe health risks”, according to Majeda Alawneh from the Palestinian Water Authority.

She said the effects of climate change had been observed in heavy rain, floods, droughts and contamination of the groundwater that many people rely on in the West Bank and Gaza Strip.

Findings published last week by the World Resources Institute said every nation in the Mena region would suffer extreme water scarcity by 2050.

The institute warned that even a brief drought could wreak havoc and totally consume supplies, pushing governments to cut water to residents.

The UAE's presidency of Cop28 has promised to make "lives and livelihoods" a key focus of the two-week negotiations in Dubai.

It said last month there was "no path" to achieving global climate goals without progress on water, nature, food and agriculture.

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

Updated: August 22, 2023, 4:35 PM