6-2 Government Revenues In 1967 the tax system in the West Bank was different from that imposed in Gaza Strip. The Jordanian Tax laws were imposed in the West Bank and Jerusalem, while the Palestinian tax laws were imposed in Gaza Strip.
6-3 Types and rates of taxes existing in Palestine in Considering the previous tax laws, and based upon the above changes implemented, Table No. 23 presents a summary of the types and rates of taxes existing in Palestine as they were in November These types can be classified into four groups : - 1- direct taxes - 2- indirect taxes - 3-local taxes - 4-others
6-4 The tax system in the West Bank Income tax law: The tax law No. 12 of 1954 and the tax law No. 25 of 1964 imposed taxes on income derived or earned by any resident from gains or profits of any work, business, profession, employment, interest and rents of property. The law imposed a proportional tax rate of 35% on business corporation net income, while it imposed a progressive tax rate on income of employees and self-employed individuals and companies rather than corporations, the rate ranged between 5% and 50%. However, the law stated several exemptions for economic and social reasons such as exemptions to encourage investments, exemptions of income from agriculture, non-profit organization, UN, employees, interest on public loan and other exemptions for family and education.
6-5 The tax system in the West Bank Indirect taxes: It include goods locally produced such as salt, oil, cement, cigarettes, alcoholic beverages and others according to Jordan law of customs and excise duties. Other indirect taxes such as fees and stamps revenues, a social tax which was imposed on imported goods at about 5% of total value and 10% of incorporation net income.
6-6 The tax system in the West Bank Local taxes: Several taxes and fees were imposed by municipalities and local councils which include: (1) The education tax to be paid by residents in municipal areas at a rate of 3% of the estimated equivalent rent of buildings within municipal limits. (2) The property tax at a rate of 18% of rent. (3) The craft and business licenses. (4) The rural tax.
6-7 The tax system in the Gaza Strip Income tax law: It is imposed taxes on income earned by residents in Palestine from business, profession, self- employed business, interest, farming business, property rents as stated in law No. 13 of 1947 and its amendments up to 1967, the tax rate was a progressive rate ranging between 5% and 50% according to income brackets for individual income, and a proportional rate of 25% on business corporation income. It included social and economic exemptions and a minimum untaxed income.
6-8 The tax system in the Gaza Strip Indirect taxes: Income taxes include customs duties and import duties, excise on specific products such as play cards and matches, stamps on business and government transactions according to original law of 1927 and its further amendments.
6-9 The tax system in the Gaza Strip Local tax laws imposed by municipal and village councils which include: (1) Business and profession licenses imposed on business or profession firms at a maximum rate of $ 60 annually, according to the size of the firm. (2) The property tax imposed on buildings and lands at 15% of rent, the rent of land to be calculated at 16% of sales value. (3) Property tax in village councils imposed on land per dunm. (4) Other fees which may be imposed.
6-10 Income and profit from public services - The non tax revenues represent an average of 19% of the total budget revenues in the West Bank and an average of 39% of the total budget revenues in the Gaza strip during the period from 1968 to Major sources of non tax revenues : - 1- health services fees - 2-vehicle registration fees - 3- Telephone revenues - 4-Justice fees - 5-military courts fees.
6-11 Assessment of former taxing system ? We can asses the this former taxing system from many points of view : - Purpose - The rate of tax - VAT - Complexity - Economic development - Legality