As part of the “Good Governance in Palestine” program, and the “Finance for Development” project, implemented by MIFTAH in partnership with AMAN and ARIJ with funding from OXFAM-Novib, MIFTAH held, on 2 March 2017, a public policy session on the proposed reforms to the 2011 Income Tax Law, its amendments and their justifications.
Representatives from the tax department in the Ministry of Finance, PLC committees, political factions, the PCBS and civil society all attended the session along with AMAN, the Independent Commission for Human Rights and the National Commission for Charitable Institutions.
A lively discussion took place between the participants on the possibilities and ways of promoting socioeconomic justice through reforming the tax system and the income tax law in particular. This includes an increase in the number of tax brackets, including reforms to the tax base, implementing the principle of differentiation between companies regarding income tax and expanding the scope of exemptions and deductions within the framework of a progressive income tax system that promotes socioeconomic justice and encourages investment.
This session follows a roundtable discussion held by MIFTAH on 23 February 2017 which hosted members of the Civil Society Team to Enhance Public Budget Transparency. On behalf of MIFTAH, Dr. Abdul Karim presented the position paper on the proposed reforms to the income tax law in order to receive and integrate feedback ahead of presenting it to decision-makers and relevant stakeholders.
During the session, MIFTAH reviewed three policy papers from a gender perspective, presented by Ms. Sama Aweida, General Director of the Women Studies’ Center and economic expert Mr. Nidal Ka’kaban.
The policy papers prepared by the Civil Society Team addressed medical referrals outside of Ministry of institutions, cash transfers for social benefits and temporary hiring in the government sector during 2015-2016. MIFTAH reviewed the papers from a gender perspective given its significance to sustainable development.
Project coordinator Tamara Tamimi said the importance of reforming the income tax law is further substantiated by the fact that income tax is considered a main component of fiscal policy that directly impacts the wellbeing of Palestinian citizens. Income tax contributes to 4.7 percent of revenues in the PA’s general budget while revenues from the Value Added Tax [VAT] are 26.6%, which undermines any opportunity for the realization of socioeconomic justice and is incongruent with the government’s declared policy. Tamimi added that through these papers and research, MIFTAH seeks to impact financial policies in a way that will promote transparency and accountability in the public budget and in the taxation system in Palestine.