Obama has questions to answer


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WASHINGTON // There was the rally in Berlin, the speech in Cairo and the Nobel Prize in Stockholm.

Barack Obama's ascent to the US presidency in 2008 was not just an American story, but a universal one. Perhaps more than anyone, he represented an idea of the US presidency as an insitution belonging to more than just Americans. His election was greeted with outsize expectations.

Four years later, many of those expectations have been dashed. And nowhere has reality asserted itself more contrarily than in the Middle East.

Mr Obama will likely face a barrage of accusations that he has failed to show leadership in the region when he faces Mitt Romney, the Republican presidential nominee, in Florida tomorrow night in the final presidential debate, exclusively on foreign policy.

Foreign policy has long been seen as Mr Obama's strong suit. But Mr Romney began to make the area a central part of his campaign last month after the attack on the US consulate in Benghazi killed four Americans, including the ambassador Christopher Stevens.

Mr Romney suggested the attack was symptomatic of a general lack of US leadership in the region that has seen the rise of Islamist militants.

But that supposes that the US could have done more to influence developments.

Arguably, Mr Obama has played his hand as best he could in a region where events have already spun out of US control, said Marwan Muasher, a Middle East expert with the Carnegie Endowment for International Peace, a Washington think tank, and a former deputy prime minister of Jordan.

An inability to press Israel to move forward with the Palestinians ever since former US president Bill Clinton began the peace process in 1993 has diminished US political credibility in the region, Mr Muasher argued.

The Iraq war then exposed the limits of US military power, unseating a regime but leaving a divided and unstable country after nearly a decade of US-led occupation. The global financial crisis before and during Mr Obama's time in office, meanwhile, has constrained the country's economic power. The days when the US could "dictate outcomes" in the region are long gone, said Mr Muasher.

Revolutions have swept the area, taking with them US friends and foes. Syria has descended into bloody civil war, threatening to drag in the countries around it. The US has chosen largely to stand aside, another fact Mr Romney has pointed to as evidence of Mr Obama's lack of leadership.

Islamists have made gains in Arab Spring countries, said Christian Whiton, a political consultant with DC International Advisory and a foreign policy adviser to Newt Gingrich, once Mr Romney's rival for the Republican nomination.

"Obama's weakness derives [in part] from being dumbstruck as the Arab Spring dawned, standing by as Islamists have made deep inroads in Egypt and Tunisia and among the rebels in Syria."

But Mr Romney has not explained what he would have done differently. He has said he will arm Syrian rebels that share US values and attach conditions to US aid. But he has not explained how he would identify the former or how the latter would provide US leverage.

Mr Obama did exactly what he had to do on the Arab Spring, said Mark Perry, a Washington-based independent military and political analyst.

"Sometimes doing nothing is good leadership," said Mr Perry. "We have to stand aside and allow people to choose their own futures. And we probably come out of this as best we could."

It's also hard to discern practical differences between the two candidates on Iran and Israel. Mr Romney has accused Mr Obama of not standing strongly enough by Israel and not being tough enough on Iran. Yet Israel has enjoyed unprecedented levels of military cooperation and support under Mr Obama, even if personal relations with Benjamin Netanyahu, the Israeli prime minister, have sometimes seemed frosty.

Iran, meanwhile, is under harsher-than-ever sanctions that are beginning to undermine the Iranian currency and is battling covert operations targeting its nuclear sites. In fact, the crux of the US problem in the Middle East may not be the differences between the two presidential candidates' foreign policies, but their similarities. The Middle East no longer waits for signals from Washington.

"The region has changed but US policies have not," said Mr Muasher. "Unless they do, US influence will become even less relevant than it is today."

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

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Tiger:independent, successful, volatile
Rat:witty, creative, charming
Ox:diligent, perseverent, conservative
Rabbit:gracious, considerate, sensitive
Dragon:prosperous, brave, rash
Snake:calm, thoughtful, stubborn
Horse:faithful, energetic, carefree
Sheep:easy-going, peacemaker, curious
Monkey:family-orientated, clever, playful
Rooster:honest, confident, pompous
Dog:loyal, kind, perfectionist
Boar:loving, tolerant, indulgent   

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