US Secretary of State Marco Rubio has defended the closure of the US Agency for International Development, which officially shut its doors on Tuesday after more than six decades of assistance to poorer countries.
Five months after Elon Musk called USAID a “criminal organisation” and said he had fed it into a “wood chipper”, the agency started by president John F Kennedy and credited with saving millions of lives around the globe no longer exists.
Its remaining functions have been absorbed into the State Department, which will oversee a new “America First” approach to international aid.
In a statement, Mr Rubio gave parts of the Middle East and North Africa as examples of places that have received US aid but held a negative view of America.
Since 1991, “more than $89 billion invested in the Middle East and North Africa left the US with lower favourability ratings than China in every nation but Morocco", Mr Rubio said. “The agency’s expenditure of $9.3 billion in Gaza and the West Bank since 1991, whose beneficiaries included allies of Hamas, has produced grievances rather than gratitude towards the United States.”
Beyond creating a globe-spanning “NGO industrial complex” at taxpayer expense, USAID has little to show since the end of the Cold War, he said.
“Development objectives have rarely been met, instability has often worsened and anti-American sentiment has only grown.”
Mr Rubio said Americans should not pay taxes to fund failed governments far from the US.
“Moving forward, our assistance will be targeted and time-limited.”
USAID was known globally for providing life-saving help to poorer countries, including medicine to combat HIV and Aids. Its termination comes amid several new reports projecting that cuts to US aid could lead to millions of preventable deaths.
The Lancet, which analysed data from 133 low and middle-income countries from 2001 to 2023, estimates that USAID-funded programmes helped to prevent more than 91 million deaths over the past two decades, including 30 million among children.
If the cuts continue, researchers project 1.8 million excess deaths in 2025 alone, with a total of 14 million by 2030 – including 4.5 million children under the age of five.
“US aid cuts, along with the probable ripple effects on other international donors, threaten to abruptly halt and reverse one of the most important periods of progress in human development,” the study said.
Mr Rubio said USAID had marketed its programmes as a charity, rather than instruments of American foreign policy intended to advance US interests
Former presidents Barack Obama and George W Bush, and Irish singer Bono, on Tuesday questioned the Trump administration's closure of USAID, including funding cuts to a popular Aids and HIV programme known as Pepfar (the President's Emergency Plan for Aids Relief).
Mr Obama called the dismantling of USAID “inexplicable” and “a colossal mistake.”
Washington has been the world's largest humanitarian aid donor, amounting to at least 38 per cent of all contributions recorded by the UN. It disbursed $61 billion in foreign assistance last year, just over half of that through USAID, according to government data.
The State Department denied criticism, saying countries want investment opportunities, not handouts.
“We think that the best thing we can do, from a moral perspective, to lead to development and a betterment of life all around the world, is to invest in the peace and prosperity of those countries,” a senior State Department official told reporters.
“Which means trade, investment, sort of growing our bilateral connection that way so that's the administration's view at least.”
The official also said reports that Pepfar funding will not continue are inaccurate.
“The Secretary said, many, many times, Pepfar will continue, will become more efficient and we believe, more impactful,” the official said.
Countries recognising Palestine
France, UK, Canada, Australia, Portugal, Belgium, Malta, Luxembourg, San Marino and Andorra
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
The biog
Name: Salem Alkarbi
Age: 32
Favourite Al Wasl player: Alexandre Oliveira
First started supporting Al Wasl: 7
Biggest rival: Al Nasr
Killing of Qassem Suleimani
How Beautiful this world is!
The Bio
Name: Lynn Davison
Profession: History teacher at Al Yasmina Academy, Abu Dhabi
Children: She has one son, Casey, 28
Hometown: Pontefract, West Yorkshire in the UK
Favourite book: The Alchemist by Paulo Coelho
Favourite Author: CJ Sansom
Favourite holiday destination: Bali
Favourite food: A Sunday roast
Mina Cup winners
Under 12 – Minerva Academy
Under 14 – Unam Pumas
Under 16 – Fursan Hispania
Under 18 – Madenat
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 biog
Name: Dhabia Khalifa AlQubaisi
Age: 23
How she spends spare time: Playing with cats at the clinic and feeding them
Inspiration: My father. He’s a hard working man who has been through a lot to provide us with everything we need
Favourite book: Attitude, emotions and the psychology of cats by Dr Nicholes Dodman
Favourit film: 101 Dalmatians - it remind me of my childhood and began my love of dogs
Word of advice: By being patient, good things will come and by staying positive you’ll have the will to continue to love what you're doing
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