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31 million ILS Tax Refund Paid for Palestinian Farmers

Like thousands of other families in the West Bank, Kamal relies on farming to make a living. He, his wife and five children grow cucumber, potato and eggplant on their 5000-meter square plot of land. Kamal and his family know too well that farming in the Occupied Palestinian Territory (OPT) is no easy business. While the Israeli occupation makes access to their land, recourses and knowledge difficult, these symptoms of occupation are not the only challenges that prevent farmers from accessing the opportunities that will help them build better lives and livelihoods.

“Working in farming is very hard, but we have no other option, we inherited this from our parents and it is the only source of income we have. The market is unpredictable, the prices go up and down and we lose a lot when natural disasters happen,” Kamal says.
Another significant issue for farmers is taxation. While the Palestinian authorities have introduced regulations allowing farmers to receive 16 per cent rebates on Value Added Tax (VAT), they were not properly implemented. These regulations had the potential to make an enormous difference to their business and their families.

To change this, Oxfam, in partnership with the Palestinian Farmers Union (PFU) through a project funded by Swedish International Development Agency (SIDA) targeted key decision makers to ensure the law was triggered and farmers could finally receive these funds. First, Oxfam and PFU lobbied the Palestinian Authorities to deactivate the income tax law.

Then, through lobbying ministries, working with local media and working with farmers to inform them of the extra income they were missing out on and helping them mobile and demonstrate, the VAT refund law was activated. 31 million shekels (approximately (9 million USD) was refunded to over 700 farmers.
For Kamal, this refund was life changing.

“I got a text message from the bank saying I got 26500 shekels (7.570 USD) of tax money in my account. Reading that text was one of the best moments of my life”, he said.
“My brother is building a new house and I owed him money. I didn’t know where to get the money. I gave my brother the money from the refund and now he is building his house. I think all farmers should open tax accounts and start getting their money back.

My neighbor is a farmer just like me, I always tell him to go open a tax account because he will get some of his money back; money he could use to improve his farming and pay his bills. Now he has seen me get this money back, maybe this will make him open his own account. Kamal added.
These refunds not only mean extra income for farmers, it generates better trust between them and their government, meaning farmers are more likely to open tax accounts necessary for these refunds and the authorities can better control tax evasion and improve budgets. It will grow the agricultural sector, as well as the overall Palestinian economy.

Abbas Milhem, Director of PFU said farmers were overjoyed with the change in policy. “Our government doesn’t have the budget to subsidize our farmers, but at the same time they burdened them with taxes and prevented them from getting the VAT money. Farmers are in need of support and paying back the taxes help them with their production”, Abbas said.
“It was huge for the farmers. “