Hamas suspends decision to tax Gaza imports

Public and local criticism pushed Gaza's Hamas government to suspend a decision to tax particular goods that merchants import through Israel. The critics were popular societies, business associations and rights group. Their rejection stemmed from the legality of the taxes in Gaza's exceptional circumstances, where an Israeli blockade has taken toll on almost all sectors of the society. The original decision, signed by Hamas' cabinet, taxed all goods that enter through Kerem Shalom crossing, from children clothes to office furniture. The opponents say that Hamas -- instead of imposing taxes -- should reward the 1.6 million people here, who have endured and suffered the Israeli economic sanctions that were imposed mainly to isolate Hamas. Since taking over Gaza by force in 2007, Hamas has been taxing goods that smugglers bring via a network of tunnels beneath Gaza's southern border with Egypt. The tunnels served as Gaza's main lifeline when Israel imposed the closure that year. Israel started to relax the blockade in 2010 after international protests, allowing nearly 3,000 new merchandises to enter Gaza in coordination with the West Bank-based Palestinian National Authority (PNA), which observes a decree by President Mahmoud Abbas exempting Gazans from paying taxes, a decree that Hamas rejects. Taxing any good or product, including those that Hamas classify as luxury items, "is negative and dangerous decision," said Ahmed Abu Ida, a businessman. "Such decisions need legislation and it should have been put before the (Palestinian) Legislative Council (PLC)." The PLC has been inactive due to the political rift between Hamas, which dominates the parliament, and the Fatah party led by Abbas, which controls the West Bank. Another merchant, speaking on condition of anonymity, said that he could not accept the new customs "because they only serve Hamas and make no benefit or privileges either for traders and consumers. " Maher Al-Tabba', director of Gaza's Chamber of Commerce, said that the business unions rejected the decision and sent letters to Hamas lawmakers and the cabinet that they will not deal with it. "This decision harms seriously the economy, which has been suffering recession after years of closure and instability due to the internal Palestinian rift, Al-Tabba' added. Representatives of importers and business owners said they will continue their efforts until the government cancels the decision. For now, Hamas said that the decision was halted for further assessment and that only four items would be taxed 50 percent less than the taxes that first appeared in the original decision. Mohammed Asqoul, the cabinet's secretary-general, said the " luxury items that will still be taxed 50 percent less" are soft drinks, juices, potato chips and office and household furniture. The original list of the goods that would be taxed included all kinds of cloths, including women Islamic gowns, frozen vegetables and canned food. Customs on chocolate or nuts were 4,000 Shekel ( about 1,100 U.S. dollars) per ton. Stopping these taxes "is positive" because it responded to pressure and objections, said Omar Shaban, an economist in Gaza. The taxes were "exaggerated and high because they target products that arrive at Gaza with high prices from the outset," Shaban added.