A protester throws a stone at riot police during clashes in front of Port Said's security headquarters on Tuesday. Amr Abdallah Dalsh / Reuters
A protester throws a stone at riot police during clashes in front of Port Said's security headquarters on Tuesday. Amr Abdallah Dalsh / Reuters
A protester throws a stone at riot police during clashes in front of Port Said's security headquarters on Tuesday. Amr Abdallah Dalsh / Reuters
A protester throws a stone at riot police during clashes in front of Port Said's security headquarters on Tuesday. Amr Abdallah Dalsh / Reuters

Morsi considers martial law as Port Said chaos enters third day


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CAIRO // Egypt's president, Mohammed Morsi, was reportedly mulling a plan to hand over security in the city of Port Said to the military as clashes between protesters and police there escalated for a third straight day.

Lawlessness and violence have wracked the normally serene city on the Suez Canal since January, when a court ordered the death sentence for 21 defendants in a trial over a football riot in 2012 where 74 people were stabbed and trampled to death.

Port Said had seen some security restored as of last week, but a surprise decision by security officials to move the defendants in the football riot case to a prison in another city set off new clashes. At least five people were killed in fighting on Sunday, including police and protester victims, with dozens more injured.

"The police are thugs," some protesters chanted yesterday. "We'll give our blood and souls for you, Port Said."

Photos posted on social networking sites yesterday showed plumes of smoke rising from several locations where protesters threw molotov cocktails on security buildings, setting them aflame.

The army attempted to negotiate an stop to the fighting on Sunday, sending its armoured personnel carries in between police and protesters, but troops were hit by live ammunition and tear gas canisters, according to military spokesman Ahmed Mohammed Ali. The ministry of interior and military said there was no friction between their forces, with the head of the police saying "unknown elements" had fired on the police to escalate a confrontation.

Mr Morsi met with his security chief and top military officers yesterday to discuss pulling police out of Port Said and putting the military in charge of security in the streets on hopes of bringing calm, officials from the military and the president's office said.

The government's inability to regain control of Port Said is a sign of how deeply divided Egypt has become two years after an uprising toppled the regime of Hosni Mubarak. Mr Morsi's deliberations over declaring martial law in Port Said had echoes of Mubarak's decision during the 18-day uprising to order the military into the streets to restore security.

Port Said's protesters largely see the military positively - particularly after troops on Sunday fired over the heads of police in an attempt to push them back from clashes with protesters outside police headquarters. Still, it is not clear protesters would stop their rallies if the army took control. "It is like a civil war right now," said Mohammed Youssef, a member of April 6, one of the youth groups that helped engineer the uprising that Mubarak. "We can't tell what would be like in the coming days because every day is getting worse than the day before." The move by the government comes at a time when some in the opposition against Mr Morsi and his ruling Muslim Brotherhood have called on the military to take back power in order to end the unrest that first erupted in November and has spiraled out of control since. The mainly liberal and secular opposition accuse the Brotherhood of dominating power and say the unrest shows Mr Morsi and the group are incapable of dealing with the country's multiple woes.

Mr Morsi's supporters have accused the opposition of trying to use street violence to overturn their successive victories in elections since Mubarak's fall. Port Said could present "a new model for civilian-military relations in the comeback of the military to political life and Morsi surely will keep an eye on it," said Galal Nasser, chief editor of Al Ahram Weekly and a fellow at the Nasser Military Academy. "Morsi is forced to bring the military because he has no other option. But he hopes the military fails in its mission," he said. The judges in the Port Said football riot case are scheduled to reveal verdicts for the remaining 52 defendants on March 9, a date that will likely lead to more protests and clashes. The death sentences for the 21 men are not final until the grand mufti, a leading religious authority, makes a final decision.

The tenuous security situation along the Suez Canal has also raised questions about what tools Mr Morsi has left to gain enough stability to forge ahead with new parliamentary elections scheduled to begin at the end of April. The National Salvation Front, a coalition of opposition forces, is planning a boycott unless the president replaces his cabinet and takes steps to make the political environment more inclusive.

* With reporting by Associated Press and Reuters

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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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