Concern over the trafficking and domestic consumption of Captagon is mounting in Egypt, where authorities have seized millions of the pills over the past five years or so.
A US official with the Drug Enforcement Administration told The National that most of the Captagon pills being consumed in Egypt now come from Lebanon, while trafficking of the synthetic drug has become the primary concern for customs agencies on the country's borders as military campaigns against drug growers in Sinai continue to bear fruit.
"Drugs primarily come from Lebanon, which is considered a production source country,” the official said. “Likewise, Syria is a source for Captagon pill manufacturing.”
Captagon in the Middle East
Since being established in the 1980s, the DEA Cairo office has provided information and support for efforts to counteract drug smuggling in Egypt.
Egypt's customs authorities made several high-profile interceptions of Captagon shipments in recent years as they move to crack down on traffickers aiming to supply growing markets from Cairo to the Gulf.
In January, the Egyptian Ministry of Interior said authorities seized eight million Captagon pills and eight tonnes of hashish worth $39 million in a shipping container at Port Said. The container’s port of origin was Beirut and it was en route to Libya, according to the 2021 World Drug Report from the United Nations Office on Drug and Crime).
In November, Egypt confiscated two separate shipments of Captagon pills and hashish at Damietta port coming from Syria en route to another Arab country. The first shipment included over 3.2 million pills smuggled in a container of canned corn, while the second included 11 million pills hidden inside packages containing water filters.
And in December 2015, large quantities of Captagon pills concealed in school desks bound for Egypt were seized at Beirut airport.
Historically, drug cultivation farms in Sinai grew poppy plants and hashish, mainly used for local consumption.
But the DEA official said the Egyptian military’s campaigns against drug farms in the Sinai “have been very successful, thanks to a joint force including the Anti-Narcotics General Administration, the National Security Sector, air forces and frontier guards”.
Along with the military campaigns targeting drug cultivation, influential religious groups have mobilised against the local producers.
Al Azhar, the highest centre of religious scholarship in Egypt, has co-ordinated with the army and police to organise advocacy missions to South Sinai, to persuade people that drug cultivation is against Islam.
“Al Azhar is a vital institution playing a large role in raising awareness and working with other agencies and local offices,” the official said.
Drug smuggling in the Sinai is “currently at a low level as most of the smuggling is now tobacco and basic food products going through tunnels to enter Gaza”.
The greater concern now is Captagon and other narcotics coming from Lebanon and Syria, he said, “as all borders and points of entry deal with potential smuggling issues”.
If you go
The flights
The closest international airport for those travelling from the UAE is Denver, Colorado. British Airways (www.ba.com) flies from the UAE via London from Dh3,700 return, including taxes. From there, transfers can be arranged to the ranch or it’s a seven-hour drive. Alternatively, take an internal flight to the counties of Cody, Casper, or Billings
The stay
Red Reflet offers a series of packages, with prices varying depending on season. All meals and activities are included, with prices starting from US$2,218 (Dh7,150) per person for a minimum stay of three nights, including taxes. For more information, visit red-reflet-ranch.net.
What is the definition of an SME?
SMEs in the UAE are defined by the number of employees, annual turnover and sector. For example, a “small company” in the services industry has six to 50 employees with a turnover of more than Dh2 million up to Dh20m, while in the manufacturing industry the requirements are 10 to 100 employees with a turnover of more than Dh3m up to Dh50m, according to Dubai SME, an agency of the Department of Economic Development.
A “medium-sized company” can either have staff of 51 to 200 employees or 101 to 250 employees, and a turnover less than or equal to Dh200m or Dh250m, again depending on whether the business is in the trading, manufacturing or services sectors.
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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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