When the Hamas government announced new taxes on some exports and imports in the Gaza Strip, merchants resorted to strikes and legal proceedings, in rare legal procedures, to protest the decisions they considered "unfair."

Last July, the government announced an increase in the value of import duties on a list of about 24 food commodities, including infant formula, mineral water, and others, in addition to additional fees on imported jeans.

Immediately, the import duties for infant formula increased four times per ton, and 15 times for imported mineral water. The decision also affected thyme imported from the West Bank, whose import fees increased tenfold.

These decisions put additional pressure on the residents of the Gaza Strip, which is already suffering from a high poverty rate and the repercussions of the blockade imposed by Israel for a decade and a half.

Economic expert Mazen al-Ajlah says that the imposed fees are "illegal," pointing out that the government (in Gaza) relied on "arbitrary estimation to determine the value of these fees, and negotiates them with the merchant, and this reflects lack of professionalism and extortion."

Tax measures came into effect in August, and merchants were forced to pay new fees to release their goods, which were seized by the Hamas government in the warehouses of the Kerem Shalom (Kerem Shalom) commercial crossing in the southern Strip, according to what a number of them confirmed.

In October, more than 40 merchants in the Gaza Strip went to court, in a first step in this field, to block the implementation of the new tax procedures, which they considered "unfair and harmful to their interests."

The judiciary responded by freezing the implementation of these increases until the cases filed are resolved, but this did not prevent the high prices of many products in the local market.

In March, the Gaza government sparked controversy again after imposing new taxes on the export of fish from the Strip and on imported fruit.

As a result, the prices of some types of infant formula increased from one shekel (0.27 cents) to nine shekels (2.47 dollars) per box, as confirmed by the owners of pharmacies in Gaza, with whom Agence France-Presse spoke.

One of the pharmacists pointed out that "prices are witnessing a global rise, and there is no possibility of an increase in fees here."

As for fish, the Gaza Strip on the Mediterranean coast imports about 120 tons of fish from Egypt per month, while the Strip's merchants are allowed to export 60 tons per month to the West Bank and Israel, according to an official in the Fishermen's Syndicate.

A fish trader, who preferred to remain anonymous, says, "In the past, we used to pay one shekel tax for every kilogram of fish we imported from Egypt through the Salah al-Din Gate (the border with Egypt). According to the new tax, we will pay 5 shekels for every kilo we import from Egypt."

A two-week strike by merchants prompted the government to back down from the new tax imposed on fruits, according to a number of senior merchants.

According to the owner of a foodstuff import and export company, "the principle in the law is that we do not pay any fees because we pay taxes in Israeli ports for the benefit of the Palestinian Authority."

"We have been committed to paying fees on goods in Gaza for years, but raising taxes in this way is unreasonable," Wassim al-Hilu continues.

Al-Hilu, a member of the Chamber of Commerce, notes that the value of fees has risen "by at least 100%, and this harms the already dilapidated economy."

On the other hand, Director General of Policies and Planning at the Ministry, Osama Nofal, says that these fees "are not aimed at collection as much as they are aimed at supporting the local product, which is what really happened."

The official of the Economic Committee at the Chamber of Commerce, Riyad Al-Sawafiri, explains that until the judiciary decided on the merchants' complaint, the Hamas government required the merchants to undertake to pay the value of the new fees retroactively if the ruling was in its favour.

Traders decided to reduce the quantities of imported goods by almost half, especially imported mineral water.

Commenting on this step, Nofal says that the government's goal in this regard is to "support desalination plants in the Strip."

However, Al-Ajlah stresses that “supporting the local product is not done by imposing a tax on imported items, but rather by canceling the income and value-added taxes imposed on raw materials, or by providing free electricity” to factories.

The sector suffers from a scarcity of groundwater and high levels of pollution. Most of its population of more than 2.3 million people relies on buying water in plastic bottles.

The tax measures affected the clothing sector, as it imposed ten shekels on every imported jeans and every abaya.

"We rejected this unfair decision, and we filed a case against him, which ended in reaching an agreement with the Ministry of Economy that allows the import of 600,000 pants and 150,000 abayas and robes annually, exempt from fees," said Nahed Al-Souda, secretary of the Clothing Merchants Syndicate.

The Gaza Strip imports between 3 and 4 million pants annually, according to Al-Souda.

Therefore, Al-Soudah considers that the exempted quantities remain insufficient.