RAMALLAH // Israel announced yesterday it would pay US$100 million (Dh367m) owed to the Palestinian Authority, billing it as a "one-time" response to a Palestinian economy struck by falling foreign aid and Israeli obstacles.
Israel stopped delivering the monthly tax revenues it collects on behalf of the Palestinians shortly after they won an upgrade in status to non-member observer state at the United Nations in November. The retaliatory move has forced the PA to suspend or pay only partial salaries to its 150,000 employees, bringing the Palestinian economy to its knees.
"Due to the financial situation of the PA, the prime minister authorised, in coordination with the finance ministry, the transfer to the PA on a one-time basis, tax revenues of the previous month totalling [US$]100 million," the office of Benjamin Netanyahu, the prime minister, said.
The statement did not make clear whether Israel would release the rest of the Palestinian tax revenue or continue withholding it in future.
The money represents only part of the amount Israel owes the PA, which earns about $100m a month in duties that are collected by Israel under interim peace arrangements reached in the 1990s. The total Israel amount ISrael is supposed to have handed over to the PA since November is $300m
Israel, which occupies the West Bank as well as the Gaza Strip and east Jerusalem, used December's tax collection to pay down a bill of about $200m owed by the Palestinians to the Israel Electricity Corporation.
Yesterday's decision follows a setback to Mr Netanyahu's right-wing Likud-Beiteinu alliance in this month's parliamentary elections, which saw a rise in seats for centrist parties.
Palestinian officials dismissed the gesture, however, describing Israel's withholding of PA tax money as "piracy" and the amount to be handed over as insufficient to reverse the economy's slide.
A PA official, speaking on condition of anonymity, criticised the move, saying that "to paint a picture of this being assistance to the PA just adds insult to injury because the Israelis have assaulted the livelihood of over a million Palestinians and undermined their institutions, almost to the brink of collapse".
Due to salary-payment disruptions, Palestinian unions have staged strikes halting public transport and schooling. Many Palestinians scrimp by shutting off heating in homes and businesses despite frigid winter temperatures.
Earlier this month, Salam Fayyad, the PA prime minister, called on Arab states to fulfil aid pledges, warning that his government's institutions had become almost "completely incapacitated".
"The financing problem that we've had in the last few years is solely due to some Arab donors not fulfilling their pledge of support in accordance with Arab League resolutions," Mr Fayyad said, adding that European countries had met their aid commitments.
Despite competing for aid with other countries in the region rattled by Arab Spring revolts, the Palestinians recently received $100m from Saudi Arabia. Mr Fayyad also said the United States had honoured all but $200m of US aid, which is held up in Congress because of the Palestinian upgrade in the UN.
Foreign aid received by the PA has dropped from $1.8 billion in 2008 to about $600m last year, forcing it to borrow from local banks, to which it now owes about $1.3bn.
hnaylor@thenational.ae
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Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
What is the definition of an SME?
SMEs in the UAE are defined by the number of employees, annual turnover and sector. For example, a “small company” in the services industry has six to 50 employees with a turnover of more than Dh2 million up to Dh20m, while in the manufacturing industry the requirements are 10 to 100 employees with a turnover of more than Dh3m up to Dh50m, according to Dubai SME, an agency of the Department of Economic Development.
A “medium-sized company” can either have staff of 51 to 200 employees or 101 to 250 employees, and a turnover less than or equal to Dh200m or Dh250m, again depending on whether the business is in the trading, manufacturing or services sectors.
Venom
Director: Ruben Fleischer
Cast: Tom Hardy, Michelle Williams, Riz Ahmed
Rating: 1.5/5
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
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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
Dr Afridi's warning signs of digital addiction
Spending an excessive amount of time on the phone.
Neglecting personal, social, or academic responsibilities.
Losing interest in other activities or hobbies that were once enjoyed.
Having withdrawal symptoms like feeling anxious, restless, or upset when the technology is not available.
Experiencing sleep disturbances or changes in sleep patterns.
What are the guidelines?
Under 18 months: Avoid screen time altogether, except for video chatting with family.
Aged 18-24 months: If screens are introduced, it should be high-quality content watched with a caregiver to help the child understand what they are seeing.
Aged 2-5 years: Limit to one-hour per day of high-quality programming, with co-viewing whenever possible.
Aged 6-12 years: Set consistent limits on screen time to ensure it does not interfere with sleep, physical activity, or social interactions.
Teenagers: Encourage a balanced approach – screens should not replace sleep, exercise, or face-to-face socialisation.
Source: American Paediatric Association
