The UN agency helping Palestinian refugees is facing an “existential” budget crisis and is appealing for urgent funding of $120 million to keep essential education, healthcare and other services running this year, its chief said on Friday.
“We keep struggling, running after cash,” Philippe Lazzarini said at the UN headquarters in New York.
“The financial situation is a real existential threat on the organisation, and we should not underestimate this because it might force the organisation to decrease services,” he said.
“We risk collapse very quickly.”
At stake is the agency’s ability to keep 550,000 children in school, provide health care for thousands and pay the salaries of its 28,000 staff in November and December, Mr Lazzarini said.
He also said it was seeking $800m at a donor conference scheduled for November in Brussels.
To fund UNRWA’s “three core activities” – education, health and social services – “we are seeking $800m a year,” Mr Lazzarini said before the gathering, organised by Jordan and Sweden.
“The main objective of the conference is to have a better predictability” and to “promote visibility”, he said.
The funding would allow the agency to keep open the 700 or so schools it managed, as well as health centres, and to provide social welfare to Palestinian refugees and their descendants.
In addition to the $800m, Mr Lazzarini said there was also a need for funds for the humanitarian aid provided by UNRWA in Gaza and Syria.
This varies from one year to the next, depending on the crisis, but which the agency estimates will be about $500,000 in 2022.
He emphasised the importance of the US returning as a major donor to UNRWA this year after former president Donald Trump stopped all funding in 2018.
The Biden administration announced in April it would provide a total of $235m to projects in the West Bank and Gaza, as well as to the agency.
But Mr Lazzarini said the US funding had been offset by decreased funding from other donors as a result of the economic impact of the coronavirus pandemic.
He pointed to the UK’s cut in its overseas aid budget from 0.7 per cent to 0.5 per cent of GDP, and the decline in Arab support to UNRWA from $200m in 2018 to about $89m in 2019 and $37m in 2020.
He said UNRWA’s uncertain funding had caused anxiety among Palestinian refugees that the “lifeline” provided by the agency could be weakened, and a feeling of being abandoned by the international community.
Palestinian refugees, their children and grandchildren now number 5.7 million.
Mr Lazzarini said UNRWA only helps the 550,000 in school and 2.8 million who have health benefits.
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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.
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