DUBAI // Parents in financial strife are defaulting on their children’s school fees at an alarming rate, a community group says.
The Pakistan Association Dubai says it has paid more than Dh1 million to help parents who have defaulted on school fees – double the amount for last year.
Pad has contributed to school fees for 41 children, said Dr Faisel Ikram, its secretary general. “We have received another 54 applications, which will cost about Dh175,000,” he said.
Last year, Pad paid school fees for 115 pupils at a cost of Dh600,000.
English Language School, a community school in Oud Metha, has passed a list of 25 pupils in need of help to the association.
“This year has been quite shocking,” said Mohammed Bajwa, the school’s accountant. “Even families who never missed any fees for years have not been able to pay a penny this year.
“In 12 years in the school, this is the first time I have seen such a large number of fee defaulters.”
The struggle to afford school fees in Dubai has led many families to send their children back to Pakistan, Mr Bajwa said.
“All these students belong to middle or low-income families whose fathers have either lost their jobs or are facing other financial crunch in their businesses,” he said.
About 1,500 pupils attend English Language School at an average cost of Dh10,000 a year.
A widowed mother, 45, who lost her job six months ago is unable to afford school fees for her 16-year-old son this year.
“I was working in a private company in Dubai and was earning Dh6,000,” she said. “But six months ago I lost my job due to the financial crisis. Since then I have not been able to pay the fees of my son.”
Her son is in Grade 9 at English Language School, which she says has been patient with payment delays. The school has been “compassionate so far”.
“But I am not sure how I would manage the money without a job,” she said. “I am very worried about my son’s future. I never want his education to be disrupted because of money.”
Pakistan Education Academy is another school dealing with many pupils whose parents have defaulted on payments.
Siddique M, an accountant at the school, said he had sent the names of 80 pupils whose parents had not been able to pay their fees for months to Pad for sponsorship.
Another concern is the number of children who have stopped attending school.
“There are many who have stopped coming to school without any notice,” said Siddique. “However, we will have a clear picture of defaulting and dropout students after summer vacations.”
The school enrols 1,600 pupils at an average annual fee of Dh8,000.
While no official statistics for dropout and default rates are available, sponsorship requests received by Pad show the situation is cause for great concern, Mr Ikram said.
“We are working to maintain the exact statistics,” he said. “It is crucial to know the depth of the problem in order to find the long-term solutions.
“Meanwhile, we will continue to do our best to support families so that the education of these children should not be interrupted.”
akhaishgi@thenational.ae
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
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
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