A relative of Ihab and Akram al-Zaanin, two Palestinian brothers who were killed by Israeli fire, is comforted by family members as she mourns during their funeral in Beit Hanun in the northern Gaza Strip on 6 September 2012. (Photo: AFP - Mahmud Hams)
Not only do the Palestinians living in Gaza have to deal with the Israeli-imposed siege of the over-populated Strip, but they also have a double tax burden, paying out to both Hamas and the Palestinian Authority.
Gaza - Abu Hassan, an automobile importer in Gaza, is in the process of cutting back his business and laying off workers after the Hamas government imposed a 25 percent tax on imported vehicles.
Abu Hassan’s problems don’t end there: He is also obliged to pay an additional 50 percent tax to the Palestinian Authority in Ramallah for cars he imports through Israeli ports. That amounts to a total of a 75 percent tax on the price of any car he imports into the Strip.
Hamas first imposed this tax in 2008, but then lifted it due to protests from car importers before reviving it again last July. The Gaza government is now taking punitive measures against those companies that have not paid their taxes, closing down their businesses and revoking their trade license.
Abu Hassan’s company was one of those shut down by Hamas, but he managed to reopen it after striking a deal with Gaza’s transport ministry allowing him to pass the tax burden onto the buyer by adding the amount to the car’s price tag.
Although this may help Abu Hassan avoid paying these hefty taxes, it will likely reduce the number of cars he is able to sell, particularly the German brands that he specializes in, the cheapest of which will now cost $42,000.
Abu Hassan says he will probably have to cut back on the number of cars he imports due to dwindling demand and intense competition from cheap Korean imports that come into Gaza through the smuggling tunnels, whose owners are only obliged to pay the 25 percent Hamas tax.
The Hamas government imposes a whole host of taxes on the residents of Gaza, such as sales and income taxes, but also on customs, property, real estate, and even taxes on smuggled goods, micro-businesses and cart vendors.
All these taxes exacerbate the difficult economic conditions in the Strip under the Israeli siege, which has been in place since 2007.
“Taxes are the right of any government, but they must be imposed wisely and rationally, and not in this exaggerated manner,” said Muhsin Abu Ramadan, an economist from Gaza. “The Gaza Strip is going through an extremely difficult time, having to contend with the Israeli siege and the catastrophic economic fallout from the Israeli assault at the end of 2008 and the beginning of 2009.”
“Lately there has been a substantial increase in taxes which have no legal or legislative basis,” he continued, attributing this spike in taxes to the Hamas government’s attempt to fill its empty coffers.
“But where are the services that the government should be providing to the people in return for all these taxes?” he asks.
In a television program organized by the Hamas media office, the top official at the Ministry of Finance, Ismail Mahfouz, announced that the $3 million his government collects every month in taxes only covers 50 percent of what it spends.
The Hamas government’s new tax policy comes at a time when Gazans are suffering from high poverty and unemployment rates.
A recent Organization of Islamic Cooperation study revealed that the rate of unemployment in Gaza has reached 42 percent while the number of people living in extreme poverty is 39 percent.
Jawad Mahmoud, 52, is typical of many Gazans who are trapped in the cycle of poverty and unemployment.
He used to make $1,500 a month as a construction worker for an Israeli company in occupied Jaffa eight years ago. Now, he spends his days sitting near a gas station in his neighborhood in Gaza City hoping that someone will hire him as cheap labor for a day or two. Since he lost his job inside the green line, he has not been able to find work more than five days a month.
His life, along with that of his wife and seven children, has become unbearable, he says. These days he considers himself lucky if he is able to bring in $50 a month.
The gas station where he sits has become a meeting place for hundreds of unemployed laborers.
“I wait here every day for hours, chatting with the others, until a contractor or someone who wants something simple fixed at home comes by and hires one of us,” Mahmoud says.
When someone comes by to pick up a worker, Mahmoud and the other laborers crowd in, desperately hoping to be picked for whatever job is offered.
This time, however, he is not so lucky, as the contractor chooses a strong young man instead. Lately, Mahmoud has been bringing his eldest son along with him in the hope that together they can bring in enough income to support their family.
He says that prices in Gaza have skyrocketed due to the siege and the new taxes, pushing his family further into poverty.
“I used to donate part of my salary to the poor, but now, I’m in need of someone to offer me financial assistance,” he says, adding that he does receive “some food aid from a number of local organizations, but not in any organized way.”
This article is an edited translation from the Arabic Edition.
River to Sea
Uprooted Palestinian 
The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of this Blog!
Gaza - Abu Hassan, an automobile importer in Gaza, is in the process of cutting back his business and laying off workers after the Hamas government imposed a 25 percent tax on imported vehicles.
Abu Hassan’s problems don’t end there: He is also obliged to pay an additional 50 percent tax to the Palestinian Authority in Ramallah for cars he imports through Israeli ports. That amounts to a total of a 75 percent tax on the price of any car he imports into the Strip.
Hamas first imposed this tax in 2008, but then lifted it due to protests from car importers before reviving it again last July. The Gaza government is now taking punitive measures against those companies that have not paid their taxes, closing down their businesses and revoking their trade license.
Abu Hassan’s company was one of those shut down by Hamas, but he managed to reopen it after striking a deal with Gaza’s transport ministry allowing him to pass the tax burden onto the buyer by adding the amount to the car’s price tag.
Although this may help Abu Hassan avoid paying these hefty taxes, it will likely reduce the number of cars he is able to sell, particularly the German brands that he specializes in, the cheapest of which will now cost $42,000.
Abu Hassan says he will probably have to cut back on the number of cars he imports due to dwindling demand and intense competition from cheap Korean imports that come into Gaza through the smuggling tunnels, whose owners are only obliged to pay the 25 percent Hamas tax.
The Hamas government imposes a whole host of taxes on the residents of Gaza, such as sales and income taxes, but also on customs, property, real estate, and even taxes on smuggled goods, micro-businesses and cart vendors.
All these taxes exacerbate the difficult economic conditions in the Strip under the Israeli siege, which has been in place since 2007.
“Taxes are the right of any government, but they must be imposed wisely and rationally, and not in this exaggerated manner,” said Muhsin Abu Ramadan, an economist from Gaza. “The Gaza Strip is going through an extremely difficult time, having to contend with the Israeli siege and the catastrophic economic fallout from the Israeli assault at the end of 2008 and the beginning of 2009.”
“Lately there has been a substantial increase in taxes which have no legal or legislative basis,” he continued, attributing this spike in taxes to the Hamas government’s attempt to fill its empty coffers.
“But where are the services that the government should be providing to the people in return for all these taxes?” he asks.
In a television program organized by the Hamas media office, the top official at the Ministry of Finance, Ismail Mahfouz, announced that the $3 million his government collects every month in taxes only covers 50 percent of what it spends.
The Hamas government’s new tax policy comes at a time when Gazans are suffering from high poverty and unemployment rates.
A recent Organization of Islamic Cooperation study revealed that the rate of unemployment in Gaza has reached 42 percent while the number of people living in extreme poverty is 39 percent.
Jawad Mahmoud, 52, is typical of many Gazans who are trapped in the cycle of poverty and unemployment.
He used to make $1,500 a month as a construction worker for an Israeli company in occupied Jaffa eight years ago. Now, he spends his days sitting near a gas station in his neighborhood in Gaza City hoping that someone will hire him as cheap labor for a day or two. Since he lost his job inside the green line, he has not been able to find work more than five days a month.
His life, along with that of his wife and seven children, has become unbearable, he says. These days he considers himself lucky if he is able to bring in $50 a month.
The gas station where he sits has become a meeting place for hundreds of unemployed laborers.
“I wait here every day for hours, chatting with the others, until a contractor or someone who wants something simple fixed at home comes by and hires one of us,” Mahmoud says.
When someone comes by to pick up a worker, Mahmoud and the other laborers crowd in, desperately hoping to be picked for whatever job is offered.
This time, however, he is not so lucky, as the contractor chooses a strong young man instead. Lately, Mahmoud has been bringing his eldest son along with him in the hope that together they can bring in enough income to support their family.
He says that prices in Gaza have skyrocketed due to the siege and the new taxes, pushing his family further into poverty.
“I used to donate part of my salary to the poor, but now, I’m in need of someone to offer me financial assistance,” he says, adding that he does receive “some food aid from a number of local organizations, but not in any organized way.”
This article is an edited translation from the Arabic Edition.
River to Sea
Uprooted Palestinian 
The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of this Blog!
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