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