08.01.12, 14:25–Finally, after a decade a ministerial economic agreement has been reached between Israel and the Palestinian Authority. Minister of Finance Yuval Steinitz announced Tuesday that he has reached an understanding with Palestinian Prime Minister Salam Fayyad about broadening economic cooperation and improving tax collection on goods which reach the PA via Israeli ports.

The agreement includes four major understandings between the two parties.

First, it has been agreed that there’s a need to set up a pipeline to transport fuels directly from Israeli ports to the PA. Currently fuels are transferred by trucks.

Additionally, two steps will improve the collection of customs tax and VAT on goods which reach the PA via Israeli ports. Today, VAT and customs tax on goods are collected at the ports and the money is later transferred to the PA.

After tax collection, goods are transferred by trucks to PA border checkpoints, yet some of the merchandise is taken off the trucks and stays in Israel.

The PA suffers since it does not receive the goods and Israel suffers since taxes are transferred to the PA yet the goods remain on Israeli soil.

The new agreement specifies that some of the goods will arrive in Israeli ports in containers sealed by electronic locks which can be monitored even after opening. The containers will leave the docks prior to tax collection which will take place only after they reach the PA…Read More>>

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