Insight and opinion from The National’s editorial leadership
October 28, 2021
The last thing most Israelis want right now is another election; they have been through four in just three years. For the past month, however, fears have grown across Israel that a fifth election is on the horizon, if the country’s broad coalition government fails to secure enough backing within the Knesset – Israel’s parliament – for a new state budget by a November 14 deadline. If the budget vote fails, the government will fall.
The coalition led by Prime Minister Naftali Bennett comprises left-wing, centrist and right-wing parties – a big-tent political alliance unprecedented in Israeli history. And it has resulted in a chain of other unprecedented events, one of the most striking of which is the inclusion of an independent Arab party, Raam, in the administration.
Getting such a diverse team to agree on major policies has proved difficult; at the start of October, the coalition members reportedly agreed not to submit any controversial bills that could divide the government until after the budget is passed.
Within a week, however, Raam’s party leader Mansour Abbas issued a letter to Mr Bennet, in which he outlined a list of demands to alleviate some of the vast inequalities between Jewish and Arab citizens. They included changes to construction and planning laws that discriminate against Arabs; the legalisation of Bedouin villages housing 90,000 people in the Negev Desert (Israel considers the villages informal settlements); a path to citizenship for families formed by marriages between Israelis and West Bank Palestinians; and a financial package to upgrade infrastructure in Arab communities.
In the Cabinet’s fraught negotiations – which have been complicated by further disagreements, including one over the defence ministry’s decision to designate six Palestinian NGOs as terrorist organisations – only the last of Mr Abbas’s demands has been agreed so far. But the scale on which it is to be implemented is significant. This week, the Cabinet approved a package of nearly $10 billion to be included in its budget proposal, allocated to an array of development projects for Israel’s Arab community over five years.
Similar initiatives have been promised before, but never fully implemented, and of nowhere near the size proposed now. If passed, the plan will invest in urban infrastructure upgrades, improved access to health care (particularly for women) and employment (including in Israel’s burgeoning technology sector), among other things.
Similar initiatives have been promised before
The justification for such a plan is clear. It would go some way in correcting the extreme economic inequality that has been allowed to fester between Jewish and Arab Israelis, and which has only undermined peaceful co-existence. More than half of Arab Israeli citizens live in poverty. Arabs are denied access to many public benefits, and their cities and neighbourhoods have suffered neglect, leading to heightened social tensions.
Even so, Mr Abbas’s critics from other Arab parties have accused Raam of ignoring larger issues, such as the preponderance of illegal settlements on Palestinian land and persistent abuses towards Palestinians in the West Bank and Gaza, for the sake of winning what they feel will ultimately become empty promises.
They have a point. A plan to invest $4bn in Arab communities was announced in 2016, but much of it never reached its intended recipients – instead getting held up by bureaucracy, or misappropriated. And the reality is that while a path to prosperity for Arab Israelis could rectify several historical injustices, it will not reverse entirely the structural problems that prevent long-term co-existence – the most serious of which is continued conflict with Palestinians.
Nonetheless, the new plan would be a step in the right direction. And it demonstrates to Israelis – Jews and Arabs alike – that when Arabs are given a voice in government, Israel has a greater chance of raising prospects for all of its citizens.
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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
Western Clubs Champions League: Bahrain Dubai Rugby Sevens: Dubai Hurricanes West Asia Premiership: Bahrain
What’s left
UAE Conference
March 22, play-offs:
Dubai Hurricanes II v Al Ain Amblers, Jebel Ali Dragons II v Dubai Tigers
March 29, final
UAE Premiership
March 22, play-offs:
Dubai Exiles v Jebel Ali Dragons, Abu Dhabi Harlequins v Dubai Hurricanes
March 29, final
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
What: The Al Burda Festival
When: November 14 (from 10am)
Where: Warehouse421, Abu Dhabi
The Al Burda Festival is a celebration of Islamic art and culture, featuring talks, performances and exhibitions. Organised by the Ministry of Culture and Knowledge Development, this one-day event opens with a session on the future of Islamic art. With this in mind, it is followed by a number of workshops and “masterclass” sessions in everything from calligraphy and typography to geometry and the origins of Islamic design. There will also be discussions on subjects including ‘Who is the Audience for Islamic Art?’ and ‘New Markets for Islamic Design.’ A live performance from Kuwaiti guitarist Yousif Yaseen should be one of the highlights of the day.
A fraudulent investment operation where the scammer provides fake reports and generates returns for old investors through money paid by new investors, rather than through ligitimate business activities.
Other acts on the Jazz Garden bill
Sharrie Williams
The American singer is hugely respected in blues circles due to her passionate vocals and songwriting. Born and raised in Michigan, Williams began recording and touring as a teenage gospel singer. Her career took off with the blues band The Wiseguys. Such was the acclaim of their live shows that they toured throughout Europe and in Africa. As a solo artist, Williams has also collaborated with the likes of the late Dizzy Gillespie, Van Morrison and Mavis Staples. Lin Rountree
An accomplished smooth jazz artist who blends his chilled approach with R‘n’B. Trained at the Duke Ellington School of the Arts in Washington, DC, Rountree formed his own band in 2004. He has also recorded with the likes of Kem, Dwele and Conya Doss. He comes to Dubai on the back of his new single Pass The Groove, from his forthcoming 2018 album Stronger Still, which may follow his five previous solo albums in cracking the top 10 of the US jazz charts. Anita Williams
Dubai-based singer Anita Williams will open the night with a set of covers and swing, jazz and blues standards that made her an in-demand singer across the emirate. The Irish singer has been performing in Dubai since 2008 at venues such as MusicHall and Voda Bar. Her Jazz Garden appearance is career highlight as she will use the event to perform the original song Big Blue Eyes, the single from her debut solo album, due for release soon.
Wicked: For Good
Director: Jon M Chu
Starring: Ariana Grande, Cynthia Erivo, Jonathan Bailey, Jeff Goldblum, Michelle Yeoh, Ethan Slater
Rating: 4/5
How The Debt Panel's advice helped readers in 2019
JL, a housewife from India, wrote to us about her husband, who died earlier this month. He left behind an outstanding loan of Dh240,000 and she was hoping to pay it off with an insurance policy he had taken out. She also wanted to recover some of her husband’s end-of-service liabilities to help support her and her son.
“I have no words to thank you for helping me out,” she wrote to The Debt Panel after receiving the panellists' comments. “The advice has given me an idea of the present status of the loan and how to take it up further. I will draft a letter and send it to the email ID on the bank’s website along with the death certificate. I hope and pray to find a way out of this.”
SL, a financial services employee from India, left the UAE in June after quitting his job because his employer had not paid him since November 2018. He owes Dh103,800 on four debts and was told by the panellists he may be able to use the insolvency law to solve his issue.
SL thanked the panellists for their efforts. "Indeed, I have some clarity on the consequence of the case and the next steps to take regarding my situation," he says. "Hopefully, I will be able to provide a positive testimony soon."
MS, an energy sector employee from South Africa, left the UAE in August after losing his Dh12,000 job. He was struggling to meet the repayments while securing a new position in the UAE and feared he would be detained if he returned. He has now secured a new job and will return to the Emirates this month.
“The insolvency law is indeed a relief to hear,” he says. "I will not apply for insolvency at this stage. I have been able to pay something towards my loan and credit card. As it stands, I only have a one-month deficit, which I will be able to recover by the end of December."
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Evacuations to France hit by controversy
Over 500 Gazans have been evacuated to France since November 2023
Evacuations were paused after a student already in France posted anti-Semitic content and was subsequently expelled to Qatar
The Foreign Ministry launched a review to determine how authorities failed to detect the posts before her entry
Artists and researchers fall under a programme called Pause that began in 2017
It has benefited more than 700 people from 44 countries, including Syria, Turkey, Iran, and Sudan
Since the start of the Gaza war, it has also included 45 Gazan beneficiaries
Unlike students, they are allowed to bring their families to France
