Abbas cancels taxes due to Hamas-run government in Gaza

In what is seen widely as another attempt to cripple the Hamas-led government in the Gaza Strip, Palestinian Authority President Mahmoud Abbas has issued a decree cancelling all taxes normally collected in the besieged territory, Ma’an news agency, which is close to Abbas, has reported.

The decree includes an exemption for all Palestinian residents in the southern governorates (the Gaza Strip) from all fees paid for government services in the coastal enclave. Also included are taxes paid through the Gaza administration, such as VAT on local commercial activities.

According to Ma’an, the move does not include import and export taxes collected by Israel on behalf of the PA in Ramallah; the taxes on real estate rented for the PA, PLO and any other local or international body; and companies which are based in the Gaza Strip but also work in the West Bank. Palestinians in Gaza are ordered to abide by the presidential decree.

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In response, the Palestinian Legislative Council pointed out that this decision could not be taken without parliamentary approval. As such, insisted the PLC, the decree is illegal and would not be put into effect on the ground.

Because import and export taxes, which are collected by Israel, go to the PA, Hamas is able to pay less than half of the salaries due to public employees in Gaza. Ever since 2006, the Ramallah-based, Israel-and Western-backed PA has paid its employees in Gaza not to go to work in an effort to bring down the democratically-elected Hamas administration. This misuse of the vast amount of international aid that Abbas and his cronies receive from Western donor countries is well known, but overlooked by Washington, Westminster and other capitals.

The Islamic movement says that up to $50 million goes to the PA from the Gaza Strip in taxes collected by Israel or the major service companies such as Jawwal, the telecommunication the mobile phone company, banks and insurance companies, which pay their taxes to the PA in west Bank.

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Observers note that this tax exemption is not meant to be for the benefit of the Palestinians in the besieged Gaza Strip in order to ease their hardship. On the contrary, it is meant to cut the revenue collected by the Hamas-run government which is used to pay for public services offered. Hence, it is most likely to increase the hardship of ordinary people. In a sense, therefore, the PA run by Fatah and Abbas is adding to the collective punishment imposed on Palestinians in Gaza by the Israeli siege.