A good question. An Israeli friend explained that these taxes were collected by Israel on goods and services destined for the PA-administered areas. There were two reasons for introducing the system. First: since the Palestinians do not have own ports or airports, they cannot collect own taxes. Second, Israel is interested in equalizing prices so as to avoid smuggling and illicit trade. So, this tax system is good for both sides.
The moneys that has been withheld because of the Hamas win in the PA election belong to Palestinians and are in trust for the time being. These moneys will have to be eventually returned with interest to the PA.
A more interesting question is what happens to this system if and when a Palestinian State is declared. Israel will have no further role to play under such a scenario. Palestinians will have to provide for their own water, electricity and other services including collection of import taxes. Knowing how corrupt the PA is, the tax money collected by Palestinians themselves is not likely not reach its destination and will, in part or whole, simply vanish. For the record, the transfer tax accounts for near ½ of the total Pal budget. The Palestinian leaders know this hidden truth and that is why they have not yet, nor will they ask for it any time soon, a UN vote granting them a separate state because it would be suicidal. |
|
