Gaza – At the Al-Salam Abu Hasirah Restaurant hall, the Civil Society Team for Enhancing Public Budget Transparency organised its 8th Conference on Inclusiveness, Responsiveness, Availability. With a view to promoting public budget transparency, three research papers were presented in the conference. These highlighted citizens’ right of access to public financial information, inclusiveness, oversight, and accountability for public financial management and public administration. The conference presented the main findings of the Survey of Transparency and Inclusiveness Practices in the Palestinian Public Budget Management and Mid-Year Review of the 2018 Public Budget. It also included a review of an analysis of the expenditures and revenues collected by the de facto government in the Gaza Strip.
In his opening statement, Mr. Issam Younis, AMAN Board member, commended the Ministry of Finance (MoF) in Gaza for its comments on a conference paper, indicating a positive development in the working relationship with the civil society. The Ministry’s participation also reflected respect for the public right of access to first-hand information and right to hold to account officials in charge of public administration and public financial management.
Younis also commended the role of the Civil Society Team for Enhancing Public Budget Transparency, which has served as an authoritative reference and reliable oversight body that monitors the implementation of the public budget. Thanks to its diligent efforts and focused reports, the Team has made clearly defined and specific recommendations to rationalise expenditures and increase revenues. The government has adopted a set of recommendations made by the Team. For example, the government has been bound to publish the Citizens Budget in Arabic. In close cooperation between the Team and MoF, the Citizens Budget was released for the first time in 2011. Younis reaffirmed the Civil Society Team’s call for publishing a written version of the public expenditure rationalisation plan, including its objectives, mechanisms, responsibilities, and every responsibility centre. However, although the government was called on to adopt it more than two years ago, the plan has not seen the light of day.
Younis highlighted AMAN’s vision, stating that the plan should not undermine programmes in support of the poor and marginalised groups.
Dr. Osama Nofal, member of the Civil Society Team for Enhancing Public Budget Transparency, presented an analysis of the structure of local revenues and expenditures, which are separately managed by the Gaza-based MoF. The analysis was underpinned by the MoF Financial Plan, decisions and public policies launched and adopted by the Ministry in 2018. Given that the National Consensus Government is tasked with the budgeting process, Nofal indicated that work has been underway since 2016 in line with a financial plan, rather than a budget. The Financial Plan items, including revenues and expenditures, were set by the Gaza MoF and approved by the MoF Undersecretary. The plan was not deliberated nor approved by the Palestinian Legislative Council.
Nofal elaborated that a new development in the MoF Financial Plan has seen declining tax and nontax revenues. This drop was driven by handing over crossing points and suspension of import permit fees, resulting in a decrease in public expenditure, particularly the payroll line item. The MoF has also had to assume a new financial burden, including emergency spending on the health sector. In addition to covering patient transfers, the Ministry now purchases medicines and medical supplies for hospitals in the Gaza Strip. Revenue sources, which were not included in previous budgets, have emerged. Channels have been opened to enter goods from Egypt, reflecting on the performance of the government financial sector performance in Gaza. These are not accounted for in the Palestinian government budget.
Nofal reviewed the key features of the Financial Plan developed and adopted by the MoF in Gaza. In particular, decision were made by the Ministry of Economy to suspend import permit fees on certain Egypt commodities, totalling NIS 10 million a month. Generating NIS 7 million on a monthly basis, customs increase levied on commodities was also suspended. Other suspensions included customs fees on vehicles (25 percent), stamp fees (008 percent), and receivables from bus companies (15 percent). Reductions involved the profit margin of contracting companies, all VAT on Hajj (pilgrimage) companies, and 95 percent of VAT on public transportation vehicles and 75 percent of VAT on private transportation vehicles. Flat-rate income tax levied on fruits and vegetables merchants was deducted. A grace period of seven days was given to merchants and companies, starting from the date on which commodities are entered. The period of clearance issued to compliant taxpayers was extended. Facilities, including closure of tax files, were granted to beneficiaries from social aid.
Nofal also showed that the Gaza government revenues were estimated at NIS 288.5 million a month. Excluding reconstruction projects, Gaza expenditures were close to NIS 196.4 million. Nofal stated that the government achieves a surplus of NIS 90 million a month in Gaza.
Revenues included VAT, customs fees and customs increase (a total of NIS 180 million a month); fuel revenues (NIS 50 million a month); income tax levied on large companies (NIS 4.5 million a month); and international aid (40 percent, or NIS 54 million a month).
The analysis showed a downward trajectory of revenues and expenditures after crossing points had been handed over. Separate items of public revenues, such as fuel revenues, have emerged after Salah al-Din Gate was operated. In addition, local revenues are not capable of funding development projects in education, health and infrastructure sectors. Taxpayers endure enormous burdens a result of rising customs increase and double taxation by the National Consensus Government.
The analysis recommended that the principles of transparency, integrity and accountability be applied to the financial planning process. It should involve the private sector in deliberations of the financial plan and publication of all eight documents relating to financial transparency. In the context of a practical national reconciliation effort, both budgets will be integrated into a single budget. Importantly, the Citizens Budget which covers different sectors will be released.
Both analytical papers presented in the Conference on the Public Budget in Ramallah in mid September 2018 were also discussed. Researcher Maysarah al-Kafarneh presented the main findings of the Survey of Transparency and Inclusiveness Practices in the Palestinian Public Budget Management. Marwah Abu Odeh, AMAN Advocacy and Community Accountability Coordinator, made a presentation on the Mid-Year Review of the 2018 Public Budget, which analyses the government’s commitment to approved financial policies.
Drawing significant media attention, the conference brought together experts and specialist. It was organised by the Civil Society Team for Enhancing Public Budget Transparency. Established by AMAN in 2010, membership on the Team includes some 40 civil society organisations active in a variety of sectors. Represented by AMAN, the Team will share its experience with the national chapters of Transparency International across the Arab region.
