The Hamas general prosecutor on Thursday ordered the closing of the main office of Jawwal, the only cellular telephone company operating in the Gaza Strip, and demanded that it pay taxes to the Gaza government, leading to fears that similar demands would be made of other companies.
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Banks and other firms say that if forced to pay taxes to the Hamas government, they are liable to suffer international sanctions for supporting a terror organization.
On Saturday the prosecutor, Ismail Jabar, told Jawwal it had 48 hours to put its affairs in order and stop evading tax payments to the government in the Palestinian enclave. He also warned that even worse measure than closure will be taken against other private companies that “evade taxes” to the Gaza treasury.
These firms all pay their taxes to the Palestinian Finance Ministry in Ramallah. A financial adviser in Ramallah called Jawwal’s closure “the opening of a frontal campaign against the Palestinian private sector.”
The closure announcement came the same week the Hamas-Fatah reconciliation government announced its resignation, without Hamas being a partner to the decision, in contravention of the principles governing the reconciliation process. It’s too early to know whether this was a purely economic decision because the Hamas government has no income; whether it was a tactical, political move, aimed at increasing Hamas’ bargaining position with the Islamic Movement during discussions on the establishment of a new government; or whether it was a strategic move indicating a final breaking off from the Palestinian Authority and the West Bank.
The closure order raises fears that similar demands to pay taxes to the Gaza regime will be made of other companies, primarily the banks operating in Gaza. A Palestinian banking executive told Haaretz that there is concern Hamas will confiscate assets or cash on grounds that they haven’t paid their taxes. There is particularly concern regarding the Bank of Palestine, which was established and registered in the Gaza Strip and whose official headquarters are there, even though it pays taxes in the West Bank.