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Tax Hikes, Increased Cost of Living behind Gaza Demonstrations

Tax Hikes, Increased Cost of Living behind Gaza Demonstrations

Sunday, 17 March, 2019 - 10:00
The gate of the Rafah border crossing is seen in Rafah, in the southern Gaza Strip November 18, 2017. (Reuters)
Gaza - Asharq Al-Awsat
For the first time ever, Hamas’ control over the Gaza Strip is being tested by sweeping public protests driven by economically struggling civilians that are fed up with hardship under the Palestinian movement’s 12-year rule.

In recent years, Hamas has seen organized but small protests against its tackling of the electricity crisis and believed that it would face same-scale demonstrations after hiking tax rates and inflating consumer prices. However, with the poorest parts of the Strip experiencing tragic food insecurity, Hamas’ move to collect more taxes was met with fierce dissent.

Hamas was driven to raise taxes after a drop in financial support from allies, such as sanctioned Iran and the outlawed Muslim Brotherhood, and the collapse of its smuggling tunnels along the border with Egypt.

When Hamas raised taxes about three months ago, it pushed up the price of about 400 imported products by 20 percent.

On February 22, Hamas imposed new taxes on traders, who in turn upped the prices of various commodities amid a stifling deterioration of the Gaza economy.

Hamas' move came after the movement seized control of the Kerem Shalom and the Rafah border crossings after the Palestinian Authority withdrew its civil servants.

Failing to raise sufficient funding for its movement, Hamas ended up stuck in a dire financial crisis that forced many institutions to close in the Strip. Hamas’ money squeeze pushed it to widen the tax brackets filled by merchants in the Strip.

The movement had suffered more from shortages after a recent row over the transfer of Qatari funds to its civil employees amid a faltering truce deal with Israel.

Various statistics indicate that more than 50 percent of the population in Gaza is living in poverty, with more than 65 percent experiencing food insecurity.

Ailed by high unemployment and economic fallout, Gazan youth demonstrated against Hamas’ policy for squeezing from the poor to fill up on its shortcomings.

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