Another ‘Gesture’ to Hamas: Sales of Diesel Fuel Shipped to Gaza Exempt From VAT

Israel has approved another “gesture” for Hamas – an exemption from Value Added sales Tax (VAT) on shipments of diesel fuel to Gaza for use in producing electricity. The exemption is good for at least a year.

Israel in October authorized a resumption of diesel oil deliveries as part of its “understandings” with Hamas, after the terror group embarked on a major terror campaign, which included firing dozens of missiles at Israel, and dispatching hundreds of terror balloons that burned hundreds of dunams of forest and farmland in Israel. Qatar is providing the money to purchase the fuel, which is expected to cost about $60 million a year. Israel is supposed to collect 17 percent VAT on that sum, but sales of diesel fuel to humanitarian organizations to be sent to Hamas will be exempt from the tax – with the Israeli taxpayer essentially subsidizing the Gaza fuel plan.

The exemption plan was approved by the Knesset Economics Committee, which is still meeting, despite the breakup of the Knesset. MK Mussy Raz (Labor) praised the approval, saying that “it was the right thing to do, as the closure of Gaza has harmed the security situation.” MK Rabbi Moshe Gafni, chairperson of the committee, said that while he approved of the idea on condition that it really did calm things down – by enabling Gazans to get more electricity – “it will not be a simple matter to get the government to approve this.”

Hamas over the weekend warned Israel to transfer $15 million in cash, or risk an aggravation of the security situation on the Gaza border. The warning was passed via Western negotiators, the London-based Arabic-language Al-Sharq al-Awsat newspaper said Sunday. Hamas demanded not only the transfer of the Qatari cash being held up by Israel, but also an end to an Israeli moratorium on dozens of products, including building materials and metal products, that Israel prevents from being exported to Gaza, out of concern that they will be used for terror purposes. Hamas is also demanding the expansion of the area where Gaza fishermen are allowed to operate to 18 miles. Currently that limit is 15 miles, which had been upped from 12 miles just a few weeks ago. A Qatari official said that the money would likely be delivered this week.