Gaza traders, consumers welcome end of double taxation
Palestinians in the Gaza Strip hope reconciliation will bring economic relief with the end of Hamas-imposed taxes and fees on top of those paid to the Palestinian Authority on imports.
GAZA CITY, Gaza Strip — The Palestinian Authority (PA) announced Nov. 1 that it had officially taken over crossings into and out of the Gaza Strip within the framework of implementing the reconciliation agreement signed between Fatah and Hamas on Oct. 12 in Cairo. On the same day, Civil Affairs Minister Hussein al-Sheikh said in a press statement, “The consensus government has decided to cancel illegal taxes in Gaza, and the government will collect only the taxes imposed by Palestinian law.” By “illegal taxes,” Sheikh meant those that Hamas had imposed on goods entering Gaza when it controlled the territory.
Residents in the Gaza Strip have been subjected to double taxation since 2014: taxes on imported goods levied by the PA before they cross into Gaza plus taxes imposed by the Hamas government on the goods. After the failure to sign a reconciliation agreement with Fatah in 2014, Hamas imposed new fees on imported goods, services and public shareholding companies in the guise of a National Solidarity Tax, in a bid to cover the budget deficit resulting from the PA’s refusal to cover government expenses and ongoing international economic pressure. Goods coming through the smuggling tunnels from Egypt were also subject to Hamas-imposed taxes.
Osama Nofal, the director general of Studies and Planning at the National Economy Ministry in Gaza, reminded Al-Monitor that the Hamas government had also imposed fees for paperwork and administrative services at ministries, such as issuing identity cards and birth certificates, that were not being levied by the PA on the West Bank. With the national consensus government now in control of crossings, Nofal said, “In the coming weeks, the Ministry of National Economy in Gaza and its counterpart in the West Bank will form committees to discuss tax unification and priorities for cooperation toward developing the industrial sector and solving the problems of the private sector in the Gaza Strip, among other important issues.”
Traders and manufacturers in Gaza are hoping that the Egypt-brokered reconciliation agreement will revive the economy. Nofal said, “Lifting taxes is a good step, but reviving the economy requires allowing the passage of merchandise whose entry into the Gaza Strip is forbidden by Israel and lifting the 10-year Israeli blockade.”
