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Hamas raises taxes on foreign imports “to boost local production”

Jerusalem24 – The Government Action Follow-Up Committee in Gaza has raised the tax on a number of imports coming through the Kerem Shalom commercial crossing in the south of the Gaza Strip.

The new taxes include NIS 10 per piece for jeans, jilbabs, and abayas; NIS 1,000 per ton of nylon; and NIS 200 per ton of juice.

The tax hike has angered many in Gaza, which is currently reeling from an increase in food prices due to the ongoing Israeli blockade in addition to the war in Ukraine.

Salameh Abu Zatir, a member of the General Federation of Palestinian Trade Unions, told Wafa news agency that the tax hikes represent “a new burden” for the people of Gaza who already suffer from high food prices and an erosion in wages.

Mazen Al-Ajla, economic researcher at the Palestinian Planning Center, claims the tax hike “indicates that Hamas does not care about its citizens or their standards of living.”

Hamas have defended the measure, saying it will support local production and manufacturing.

The head of Hamas’ media office, Salameh Maarouf, told Quds News that the “main goal is to provide protection and development for local products.” Maarouf mentions the sewing sector which formerly employed 45,000 workers and today has come to a near-standstill. Maarouf says there have also been demands to stop importing ready-made ceramic tiles from abroad.

However, the head of the economic committee at Gaza’s Chamber of Commerce, Raafat Naim, expressed doubt that the raised taxes would go towards subsidizing or supporting local production: “They argue that they are subsidizing local products, but will these collected sums be given to the owners of local factories? Of course not.”

The share of agriculture and manufacturing in Gaza’s economy declined from 34% in 1995 to 23% in 2018, according to a 2020 UN report, while those sectors’ contribution to employment fell from 26% to 12% during the same time.

In 2020, Palestinian imports of goods and services were worth $5.02 billion, including $2.77 billion from Israel, while exports stood at $1.09 billion.

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