Activities 2022

AMAN: Taxes on local commodities and products in the West Bank and Gaza reflects abuse of power

AMAN: Taxes on local commodities and products in the West Bank and Gaza reflects abuse of power

Gaza – The Coalition for Accountability and Integrity (AMAN) views with deep concern the double taxation policy implemented by the Committee for Follow up on Government Functions in the Gaza Strip and Palestinian government in Ramallah. In the context of political rivalries of both parties, this policy turns a blind eye to the lives of Palestinian citizens, further compounding and increasing the cost of living. It particularly affects the population of Gaza, which is under siege, suffers from deteriorating living conditions, and contends with skyrocketing prices. Palestinian producers assume further financial burdens in production and marketing operations.

AMAN has followed with great interest the Gaza-based Minister of Finance’s decision on levying VAT on local products made in the West Bank and marketed in the Gaza Strip. Having taken effect on 18 May 2022, the decision is applied to three commodities, namely, mineral water, carbonated soft drinks, and potato chips. The decision may also be applicable to a number of national products (another 24 commodities, including food, wood, plastic, and paper products), currently manufactured in the West Bank and imported to Gaza through the Karm Abu Salem Commercial Crossing.

Released on 23 May 2022, the Government Information Centre of Gaza justified the decision on charging VAT on West Bank products by the fact that the West Bank-based Ministry of Finance continued to impose VAT on products and commodities locally produced in Gaza and marketed in the West Bank. The decision was also triggered by the exclusion of Gaza merchants from the Ramallah-based government’s decision on flour tax exemptions.

As a consequence, Palestinians in Gaza are victims of the double taxation policy and illegal tax collections, which cause severe damage to these citizens. While it affects the final prices of national products, the decision also negatively impacts national economy. It undermines the ability of national products to compete with foreign and Israeli products, which dump the Gaza markets. Public access to information on fiscal and economic policies continues to be denied by the Committee for Follow up on Government Functions in Gaza. In addition to poor accountability for public financial management, information on the mechanism for estimating and collecting domestic revenues is also blocked.

AMAN called on all governing authorities in the West Bank and Gaza Strip to abandon the practice of double taxation by imposing VAT on national products manufactured in the West Bank and Gaza. Relevant decisions must be rescinded immediately. AMAN further called on the Palestinian government to apply the tax exemption policy to basic commodities imported to Gaza, including wheat products.

AMAN reiterates its call on the Committee for Follow up on Government Functions and Ministry of Finance in the Gaza Strip to put in place a policy for the disclosure of public fiscal and economic policies. Statements will be made publicly available, allowing easy public access to full and accurate information in a timely fashion.