Ramallah – As the due date for approval of the 2019 Budget Proposal draws closer, the Civil Society Team for Enhancing Public Budget Transparency called on His Excellency Mr. Shukri Bisharah, Minister of Finance and Planning, to hold a hearing session. In addition to highlighting major trends of the 2019 Budget Proposal, the hearing will include a discussion of proposed fiscal policies and priorities. Information also need to be made available about the new Draft Public Budget Law, which has so far been shut down from public debates. The Civil Society Team should have access to the Budget Proposal and provide relevant comments to the government before the Draft Public Budget Law is enacted.
The Civil Society Team for Enhancing Public Budget Transparency deplored the government’s claim to adopting a participatory approach, expressing dissatisfaction at the failure to make publicly available many sector and cross-cutting strategies. This practice runs counter to the pledges made by government under the National Policy Agenda (NPA) 2017-22. In particular, national policies 9 and 10 of the NPA provide for strengthening accountability and transparency, as well as for effective, efficient public financial management. These involve facilitating civil society engagement and public access to information. Members of the Civil Society Team also expressed dismay that a public debate over the 2019 Budget Proposal has been absented until this moment, gravely violating the provisions of relevant laws and regulations.
It is worth noting that, according to the Law on the 1998 Regulation of the Public Budget, the Budget Proposal should have been deliberated by the Palestinian Legislative Council (PLC) at the beginning of November 2018. Consequently, the Draft Public Budget Law would be enacted on 1 January 2019. The fact that the PLC is out of session cannot disrupt enactment of the budget. Under the current circumstances, the Budget Proposal should necessarily be discussed with the Civil Society Team, which serves as a representative of civil society, rather than a substitute of the PLC. Over the past years, draft public budget laws have been enacted in March; that is, after a whole quarter into the fiscal year.
The Civil Society Team also requested that relevant members be invited to discuss the 2019 Budget Proposal and review fiscal performance in 2018. As a key tool of accountability, the final accounts of 2012-2016 should be published. After many years and successive governments, however, the Team is sceptical about the capability for a real accountability practice.
Towards October 2018, net revenues totalled NIS 10 billion, including NIS 4 billion in local revenues and NIS 6.6 billion in clearance revenues. The latter are taxes levied and transferred by the Israeli side to the Palestinian Authority. According to the Paris Protocol, 3 percent is deducted from these revenues.
VAT levied on all commodities amounted to NIS 2.6 billion, or 25 percent of revenues. Customs revenues included NIS 3.3 billion, or 33 percent of total revenues. These are generally customs duties paid by consumers for imported commodities. Fuel tax generated NIS 2 billion, or 20 percent of all revenues. This tax is paid by citizens for public transportation and fuel usage.
Overall, this data shows that Palestinian citizens, both poor and rich, are the main financers of more than 82 percent of the Public Budget. Even if they are apparently excepted from the income tax, the poor continue to pay indirect taxes, which make up as much as 80 percent of total revenues.
The Civil Society Team called, among other things, for taking into account the recommendations made by civil society organisations. Citizens have the right to have access to and participate in the budgeting process. As citizens lawfully have the right to determine their own priorities, the government is required to respond to these priorities. To promote the culture of perseverance, responsive and inclusive programmes and budgets should be enacted. In this context, the 2019 Budget Proposal should be made publicly available and discussed. In addition to taking account of the civil society and citizens’ priorities, the public right of access to information should be enhanced. As it provides services and assistance to poor households, budget appropriations for the Ministry of Social Development should be increased. In consistence with the NPA, a responsive budget allocation should be earmarked for the Ministry of Health. A comprehensive and mandatory insurance system will be in place. Occupying the lion’s share of the public budget, the security sector expenditures should be reviewed, controlled, and reduced. The tax system should be revisited to simulate social justice requirements.