Decades of mass tourism have taken a toll on the waters, coral reefs and natural spaces of Egypt’s most popular resort city.
Now, as Sharm El Sheikh gears up to host the Cop27 climate change conference in November, preparations have brought much-needed development for the beach town, which suffered a slump in tourism when the Covid-19 pandemic struck.
But locals are apprehensive about an anticipated increase in global interest in the tourist destination after Cop27.
Some worry the crowd will further damage the fragile ecosystem surrounding the Red Sea.
The National spoke to some of the city’s local diving instructors, who see first hand the state of the Red Sea’s ecosystem and the damage it has sustained over the years because of tourism.
“Sharm has some of the most beautiful diving spots in the world, no question. But what you have to keep in mind is that the majority of its tourists don’t come here for the diving,” said Sherif Khairat, head of technical diving at Circle Divers, a prolific centre in the area which organises regular clean-up initiatives in the Red Sea.
“Most people come for the nightlife or the beach, and they’re on vacation, they treat the city like any other beach resort they have been to, which is not right because it is truly unique.”
Mr Khairat said before president Hosni Mubarak was ousted in 2011, the city was not accessible to a large portion of Egyptians, mainly lower-paid citizens who were kept away by high pricing schemes.
However, in the politically unstable years between Mubarak’s removal and the election of President Abdel Fattah El Sisi in 2014, the city began to open to a larger segment of the populace, making it much more crowded than it once was, which Mr Khairat said had a direct effect on the deterioration of the city’s environment.
“The trick is that we as Egyptians are not raised with an awareness of the environment and how to preserve it,” he said.
“This is why I think that the top priority for the government with Cop27 is to set a good example for the citizens and educate them that their actions have consequences for the world around them.”
In response to increasing amounts of plastic waste thrown into the Red Sea by tourists, in 2019 the city’s municipal authorities banned the use of single-use plastics.
Circle Divers is one of several diving centres in the city that organises regular clean-up efforts in the sea. However, it is not enough to resolve the problem.
Like Mr Khairat, the city’s more environmentally minded residents are hoping that sustainability mandates announced by the government ahead of the conference will bear fruit. But many of them are unsure whether the strategies will be enforced after the conference closes.
“Rules are nothing without enforcement,” Mr Khairat said. “We already have signs everywhere asking people politely to not throw their garbage in the sea or feed the fish. They don’t listen a lot of the time and they are not reprimanded, because tourists are valuable in Sharm, which creates a little bit of a conflict of interest.”
On the other hand, many of the city’s residents admit to being more excited by a potential boost in tourism after Cop27 than they are about a greener future for the city.
“Sharm El Sheikh is nothing without tourists in it,” said Mohamed Hashem, 34, a coffee shop attendant in the city.
“The city has had quite a dramatic history compared with other tourist destinations in Egypt. Whether it’s terror attacks like the downing of the Russian plane in 2015 or the regular droughts in the tourism markets because of international crises, there is always something that sets us back here.
"The hope is that this conference will establish a blank slate for Sharm and maybe lead to more steady business.”
Meanwhile, others among the city’s workers are happy that their financial interests are aligned with a more sustainable future for the city.
“I think it was very intelligent of President El Sisi to combine all of the nation’s interests into one event,” said Ali Ibrahim, 58, a resident of the coastal city.
“On the one hand you’ve got the environmentalism stuff that is the talk of the whole world right now. On the other hand, it is a perfect opportunity to put Egypt and Sharm El Sheikh in the international spotlight, which will inevitably result in a boost in tourism.”
Sharm El Sheikh is undergoing one of its most extensive makeovers in preparation for the conference, with several projects under way, including two additional solar power plants, a number of charging stations for electric vehicles, a large-scale road-widening project and the establishment of a 12.5-hectare central park.
Cop27 takes place from November 7-18.
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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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