Tax rises fuel Gaza merchants’ discontent

Hikes in import and export tariffs imposed by the Islamist rulers of the Gaza Strip since last year have fuelled discontent among merchants in the impoverished, blockaded territory.

In March, Gaza’s Hamas rulers imposed new duties on the import of fruit and the export of fish.

Although the fruit levy was later reversed after traders went on strike, the seafood duty remains. Traders refusing to pay risk having their perishable goods stalled at crossing points from the enclave.

The increases are the latest in a series of new levies on goods entering and exiting the coastal territory where 2.3 million Palestinians struggle to survive.

In July 2022, Hamas imposed tax increases on 24 other items including bottled water and certain clothes, forcing traders to remove some brands from the market when shoppers could not afford the newly inflated prices.

Wassim al-Hilu, a food importer-exporter and member of Gaza’s chamber of commerce, said Gazans are already saddled with taxes paid to Israel -- which collects a range of fees on behalf of the Palestinian Authority (PA).

A split between Hamas and the PA, which administers the Israeli-occupied West Bank, often leads to disputes over taxation and Hilu said the new fees are harming Gaza’s “already ailing economy”. The territory has been under a crippling Israeli-led blockade since Hamas -- designated a “terrorist” entity by the United States, the European Union and Israel -- took power in 2007.

The poverty rate has reached 53 percent, according to the Palestinian Central Bureau of Statistics, and unemployment has hit 45 percent, the International Monetary Fund said.

Rising prices

In October, dozens of Gazan merchants took legal action against last year’s tax hikes, which were then frozen pending a court ruling.

But in supermarkets, traders have already reduced their reliance on imports pending the court decision, said Riyad Sawafiri, from the chamber of commerce.

Critical imports of bottled water, which the territory’s residents depend on due to shortages of potable water, have halved as a result.

Osama Nofal, director of planning at Gaza’s economy ministry, said the levies aim to encourage consumers to “support the local producer”, referring to a desalination plant that makes drinking water.