Hugh Naylor
The National
October 9, 2011 - 12:00am

RAFAH, GAZA STRIP // Hamas is imposing a taxation system that raises the cost of fuel, permits and government-property leases. The measures are angering Gazans and raising speculation that Hamas is suffering from a significant drop in funding from Islamist supporters.

Analysts say Hamas's financial backers may be providing less because they now are sending money to Islamists in Egypt and helping fund Arab Spring uprisings. Also, Iran may be punishing Hamas for failing to publicly pledge its support for the Syrian regime during its crackdown on protesters.

Gazans complain that officials with the Hamas government have suddenly begun requiring permits and demanding exorbitant fees from people who have expanded their homes.

Privately run beachfront businesses and restaurants, which rent from local municipalities, have seen their rents double or triple.

Taxi drivers are being told to pay years of unpaid income taxes if they want their drivers licences renewed. The Palestinian Authority stopped collecting those taxes when it controlled Gaza during the second intifada.

Even tunnel operators, the economic lifeblood of the Israeli-blockaded territory, have been told to register with the authorities, and pay for permits, or face closure.

"We are smugglers and what we do is inherently illegal. How can they ask us to get licensed?" asked a tunnel operator on the border with Egypt, who gave his name as Abu Saqer, 38.

At the same time, Hamas raised the price of petrol and heating fuel last month, causing inflation to ripple through the economy, weakening purchasing power and causing job losses.

All this has nearly bankrupted Jamal Abu El Qumsan, 44, the owner of the Gallery Al Ittihad, a popular cafe in Gaza City.

"How can the government in Gaza impose taxes on people when we are all are under siege, when they can't provide job opportunities?" he asked. Gaza's unemployment rate for its estimated 1.5 million people hovers around 50 per cent.

The cafe owner has compensated for higher energy prices by unplugging his restaurant from the Gaza power grid, which remains in disrepair since Israel's three-week war on Gaza that began in 2008.

"It's actually become cheaper to just to use my generator", he said, though he estimates it costs him a hefty 900 shekels (Dh893) a month.

Few know the reasons for the new financial measures. Hamas, a hybrid between governing authority and resistance movement, does not disclose detailed information of its budget or donors. Most of its money is believed to come from Iran and charity organisations.

Mustafa Sawaf, a columnist for the Felasteen newspaper, said Hamas has suffered from the Arab Spring because its financiers have turned their attention to, for example, helping Islamists win elections in Egypt.

Because of this, he said, "the focus is not the Palestinian issue. The donors are funding projects elsewhere because there are developing and pressing financial issues elsewhere".

Some suspect the crisis may be the result of Iran cutting off its funding to Hamas as punishment for failing to fully embrace the government of Bashar Al Assad, the Syrian president. Hamas is headquartered in Syria, which is also an ally of the Islamic Republic.

This may explain why the Hamas government was unable to pay salaries over the summer months to many of its 44,000 public employees. Some Hamas officials have said the money from the new taxes and fees is meant to pay these salaries.

Others, however, say Hamas wants the additional money to strengthen its business empire.

Hamas built its own agricultural industry on large tracts of land formerly used by Jewish settlers before Israel abandoned its Gaza settlements in 2005. It also has opened entertainment parks, such as the Asdaa City for Media Production. Located on what was the Israeli settlement of Gush Katif, Asdaa now has a petting zoo and carnival-like attractions.

Moreover, Gazans complain that family members and friends of Hamas leaders are given preferential treatment when it comes to fees and obtaining business licences. Dozens of beachfront restaurants and cafes have opened in recent months, even as Ramadan Malaka's beachside cafe, the Al Gharoob Restaurant, has had its yearly municipal fees - which include rent - rise from US$4,000 to $15,000 (Dh14,700 to Dh55,000).

"We have been here for 22 years, and this is our worst season," he said of his restaurant's business. He has had to reduce staff from 50 to about 20.

Like many here, he believes that the money does not go towards municipal services but to the large number of newly built villas that are believed to be homes for Hamas leaders.

"I pay 2,500 shekels a year as a tax for beach cleaning. They [the municipal authorities] never clean. I'm the one who has to go out there and clean every day," Mr Malaka said.

But public widespread frustration with alleged Hamas corruption is rarely heard. The group brutally silences such dissent.

"The PA was very corrupt, but at least you could talk about it," said Mr Malaka. "With Hamas, well, you can't."


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