On Thursday, Lebanon will enter the two-month constitutional period during which parliament must elect a successor to President Michel Aoun. Revealingly, Hezbollah has adopted a different attitude than the one six years ago, when it had provoked a debilitating two-year presidential vacuum as leverage to bring Mr Aoun to office.
As a number of observers have remarked, Hezbollah cannot look back on its support for an Aoun presidency as a success. While this did allow the party to reinforce its alliance with a major Christian partner, strengthening Hezbollah’s leverage in the political system, it also exposed the party to the repercussions of Mr Aoun’s falling popularity. Rightly or wrongly, many Lebanese associate the economic collapse that began in 2019 with the President, even if there is plenty of blame to spread around the country’s corrupt political class.
With economic pain reaching deep into the Shiite community, Hezbollah appears to be more careful in its presidential calculations today. To an extent, conditions have also imposed this. The outcome of the parliamentary election in May led to a legislature in which none of the country’s major political alignments has a majority, making for what is often a hung parliament. Only on rare occasions can Hezbollah impose a majority, as when it compelled its reluctant Aounist allies to help ensure the re-election of Nabih Berri as Speaker.
Rather than naming a presidential candidate, Hezbollah appears to be waiting and seeing if a consensus emerges around a given figure. The problem is that two of its Maronite Christian allies are competing for the presidency – Gebran Bassil, the son-in-law of Mr Aoun and head of the Free Patriotic Movement, and Suleiman Franjieh, the grandson of a former president. However, both men face major problems – Mr Bassil is under US sanctions, while Mr Franjieh provokes little enthusiasm outside a small portion of his own community.
Hezbollah has faced challenges that showed antagonism towards it was growing in potentially dangerous ways
Hezbollah can see that if it were to openly choose between either man, it would risk alienating the other, leading to tensions with an ally. At the same time, the party is also very keen to ensure that the next president does not pose a threat to its strategic interests, and does not represent an obstacle to its agenda in Lebanon. The reason for this is that in the past year, Hezbollah has faced challenges that, if they did not undermine the party, did show that antagonism towards Hezbollah was growing in potentially dangerous ways.
In August 2021, Hezbollah supporters were ambushed by members of a Sunni tribe in Khaldeh, after a tribesman had killed a Hezbollah member in a revenge killing. The incident could have easily spread into a broader Sunni-Shiite armed conflict had the army not intervened immediately to control the situation.
Not long thereafter, Hezbollah members were forcibly prevented by Druze villagers from firing rockets at the contested Shebaa Farms area. The villagers, fearing Israeli retaliation, manhandled the party’s members and detained them, until the issue was resolved. The incident led to tensions between Druze and Shiite, before order was reimposed.
Most significantly, last October, Hezbollah and allied Amal supporters demonstrated against the investigation into the Beirut Port explosion and some entered the Christian neighbourhood of Tayyouneh. Young men from the area fired on them, killing two of the parties’ supporters, while several others were shot when the army intervened. The episode was the most serious breach of civil peace in years, and heightened Christian-Shiite tensions.
While Hezbollah was defiant in all three cases, the message could not have been reassuring: an increasing number of Lebanese sectarian groups appeared willing to challenge the party, even militarily in some instances, and Hezbollah’s options to respond were limited. If the party resorted to its weapons to intimidate its foes, this could have unleashed broader, sectarian-driven conflict, which could well have backfired against Hezbollah.
In a speech last week, Hassan Nasrallah, the party’s secretary general, echoed this unease, when he declared that Hezbollah would not be dragged into a civil war, nor would it allow such an outcome. He stressed that Hezbollah sought a dialogue, stating: “Our prime issue during the next stage is co-operating with various political powers in order to build a just and capable state.”
Nasrallah went further, saying Hezbollah was even willing to discuss a national defence strategy, which would ultimately seek to integrate Hezbollah’s weapons into the state.
One might question Nasrallah’s sincerity, but his conciliatory tone was certainly a sign of the party’s more open attitude towards the presidency. With agreement over the nuclear deal with Iran reportedly close, Hezbollah feels this may be a good time to be mollifying, as Tehran and its regional allies are expected to benefit from the outcome.
This brings out a paradox in the party’s behaviour today. On the one hand it remains strong, as it has continued to exploit internal Lebanese divisions to remain dominant, while the regional outlook is also playing in its favour if Iran comes out strengthened.
At the same time, the party is more conscious than ever of its vulnerabilities. This is especially true in a domestic context shaped by Lebanon’s economic collapse, for which Hezbollah offers no remedies. Regionally, even if Iran secures its interests, developments in Iraq and Lebanon reflect increasing resentment of Iranian hegemony.
Unless the region moves towards greater confrontation if the nuclear accord fails, Hezbollah is likely to pursue its facade of conciliation over the Lebanese presidency. That doesn’t mean a candidate will be elected soon, and a vacuum remains highly likely, but Hezbollah will not force the issue. Rather, it will probably focus on helping to shape a consensus around any candidate who doesn’t endanger the party.
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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
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The UN General Assembly President in quotes:
YEMEN: “The developments we have seen are promising. We really hope that the parties are going to respect the agreed ceasefire. I think that the sense of really having the political will to have a peace process is vital. There is a little bit of hope and the role that the UN has played is very important.”
PALESTINE: “There is no easy fix. We need to find the political will and comply with the resolutions that we have agreed upon.”
OMAN: “It is a very important country in our system. They have a very important role to play in terms of the balance and peace process of that particular part of the world, in that their position is neutral. That is why it is very important to have a dialogue with the Omani authorities.”
REFORM OF THE SECURITY COUNCIL: “This is complicated and it requires time. It is dependent on the effort that members want to put into the process. It is a process that has been going on for 25 years. That process is slow but the issue is huge. I really hope we will see some progress during my tenure.”
British Grand Prix free practice times in the third and final session at Silverstone on Saturday (top five):
1. Lewis Hamilton (GBR/Mercedes) 1:28.063 (18 laps)
2. Sebastian Vettel (GER/Ferrari) 1:28.095 (14)
3. Valtteri Bottas (FIN/Mercedes) 1:28.137 (20)
4. Kimi Raikkonen (FIN/Ferrari) 1:28.732 (15)
5. Nico Hulkenberg (GER/Renault) 1:29.480 (14)
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