Livestock and fruit merchants in the Gaza Strip are outraged because they believe that the Ministry of Finance (MOF) has imposed new taxes on them. The MOF, however, said that it is just using a new mechanism of tax collection.

Hasnaa Al Rantisy – Palestine Economy Portal

Translated by: Tamara Barakat

According to a statement issued by the MOF, a fixed tax was imposed on agricultural and animal products starting from today. The Ministry explained that the imposed taxes amount to 3 agora per gram of fruit, and 2 agora per kilogram of vegetables. Moreover, a $50 tax is imposed on each cow, $30 on each sheep or goat, and $30 for each of any other animal.

Outrage among Merchants

The fruit merchant, Hamed Al-Nounou, said that he now has to pay 5 thousand NIS for each 20 tons of fruit, i.e. 250 NIS per ton, whereas he used to pay 40 NIS per ton before. The tax increased from 40 to 250 NIS. He says that the situation is unbearable especially since the economic situation is bad and debts on merchants are mounting. He questions where such a decision is going to take us.

Hikmat Salman, another fruit merchant, commented on the tax, saying, “This tax used to be $2.5, then it increased to $3, and now it has increased again to $30.” However, he does not believe that the increase in the tax will lead to an increase in fruit prices. “These fruit products have been sold for ages. It is unlikely that the merchants are going to raise their prices since they want to sell their products quickly before they become damaged while in storage.”

Merchants have announced that they are going to stop importing fruit until the tax raise decision is cancelled. Salman also said that the merchants will continue their protests, even if they will be forced to go to court.”

The MOF’s Response

Awni Al-Basha, the undersecretary of the Ministry of Finance in Gaza, said, “We have not imposed any new taxes. This is just a new mechanism for collecting taxes from merchants who dodge paying them.”

He further clarified that the tax being collected is an income tax, levied under article 35, No. 17, issued in 2004. It will be collected as a fixed tax, without applying it to tax brackets. It is disbursed on 12 months.

He asked, “Who can enact a new law? Can anyone enact a new law in this manner? What happened was simply finding a new way to collect taxes. Nobody can in any way collect and impose new taxes.”

Commenting on the merchants’ opinions regarding the matter, Al-Basha said, “These merchants dodge paying taxes. The new mechanism of tax collection will force them to pay the taxes.” He also called on merchants to go to the court instead of talking to the media in a random and unclear manner.

Mohammad Abu Habab, an economic expert, said that this is not a newly imposed tax, but the income tax that is collected under article 35, No. 17, issued in 2004. He also said that the MOF will make more than 6 million NIS per month with the new tax collection mechanism.

He explains, “An average of 100 fruit trucks enters into Gaza on a daily basis. Each truck contains around 40 tons of fruit, and $30 will be paid for each ton.”

Mockery on Facebook

Activists on social media websites expressed their discontent with the new tax collection mechanism. For example, Mohammad Al-Saqqa commented, saying, “If you want some bananas, buy them now while you still can.” Nana Abu Shabana said, “Oh, well, fruit and meat are the food of officials anyway, so most of the people won’t be affected.” Yasser Abed Al-Ghafour sarcastically said, “We won’t be eating any fruit anymore.”