Hamas MP says Gaza society will ‘collapse’ without new tax
Abu Halbiya said that flour and medicines – classified as essential goods - would be exempt from the tax
A member of Hamas’s parliamentary bloc defended a new import tax law when he said the bill was necessary to ease the suffering of the poor in the Gaza Strip and prevent the impoverished enclave from “collapse,” an Israeli newspaper quoted him as saying on Sunday.
Hamas, an Islamist party in charge of the densely populated Gaza Strip, introduced earlier this month taxes on imported items it considers non-essential.
“The purpose of the law is to ease the suffering of the poor in the Gaza Strip,” Ynet News quoted Ahmad Abu Halbiya as saying.
He added: “We’ll collapse as a society in Gaza if we do not impose these taxes. It’s not much but it will benefit the citizens of Gaza - especially the security police who need money for cars.”
Abu Halbiya said that flour and medicines – classified as essential goods - would be exempt from the tax.
However, over 400 items will be included such as variety of crops, meat, fruits, vegetables, clothing and electronics. Most of the items are imports from Israel, Egypt, Saudi Arabia and Turkey.
World Bank: Gaza ‘on verge of collapse’
Abu Halbiya’s warning comes after the World Bank said on Friday that Gaza’s economy was in a worse state than any other in the world, with unemployment at a global high, output contracting sharply and the long-term prospects worrying.
Repeated rounds of conflict, internal divisions and the embargo Israel and Egypt impose have left the territory “on the verge of collapse,” the report said, with its 1.8 million population facing poverty and destitution despite vast aid.
“Blockades, war and poor governance have strangled Gaza's economy and the unemployment rate is now the highest in the world,” said the report, drafted by Steen Lau Jorgensen, the World Bank's director for Gaza and the West Bank.
It is to be presented in Brussels on May 27.
“Gaza’s exports virtually disappeared and the manufacturing sector has shrunk by as much as 60 percent. The economy cannot survive without being connected to the outside world.”
Among the startling statistics cited in the report are:
* Overall unemployment now stands at 43 percent, and 68 percent among those aged 20-24.
* Gaza’s current real GDP is only a couple of percentage points higher than it was 20 years ago. Over the same period, the population has increased by 230 percent.
* Last year's war between Israel and Hamas led to a 15 percent contraction in GDP for the year.
* Real per capita income in Gaza is now 31 percent lower than it was in 1994.
* Between 1994 and 2012, Gaza’s manufacturing sector, which should be the driver of the economy, shrank by 60 percent.