Palestinian unity government extended tax immunity to August for the only functioning power plant in Gaza, said council of ministers of Palestine in a statement on Tuesday.
In late March, the Palestinian unity government – based in the West Bank city of Ramallah – exempted the power plant, which is used to generate electricity, from paying fuel taxes.
However, the unity government has since re-imposed taxes on the plant’s fuel purchases, which, according to Gaza’s Energy Ministry, the cash-strapped strip can ill afford.
The new fuel tax is 3 Israeli shekels (roughly $0.8) per liter of fuel, meaning total monthly taxes to be paid by the plant now stand at some 40 million shekels (roughly $10.4 million), according to Loaai Hanash, director of customs and taxes at the Palestinian Finance Ministry.
Every month $10,4 million needed to be paid as tax for the needs of the power plant.
Meanwhile council of ministers of Palestine said that they signed a memorandum of understanding to buy natural gas for the power plant which they think to reduce cost of electricity production.
Reporting By Zeynep Hilal Karyagdi
Writing By Huseyin Erdogan
Anadolu Agency
huseyin.erdogan@aa.com.tr