Daily Israel Report

'Israel is Sliding Into Total Dependence on the PA'

Factory owners: PA deliberately cuts taxes so that Israeli industry can't compete; Bennett must intervene.
By Maayana Miskin
First Publish: 6/5/2013, 9:51 AM

Workers prepare leather at PA factory in Hevron
Workers prepare leather at PA factory in Hevron
Israel news photo: Flash 90

Israeli factory owners in the textile and furniture industries have called on Minister of Economics and Trade Naftali Bennett to tax Palestinian Authority-area goods in order to save Israeli industry.

Despite its reported financial crisis, the PA is deliberately taking in less tax income than it could in order to hurt Israel, says factory owner Shaul Ben-Yosef, who spoke to Arutz Sheva.

Israeli factories are currently forced to compete with PA factories – a competition that is heavily biased in the PA’s favor, he said. “They don’t pay municipal tax or other taxes, so they can sell things cheaper. I sell bags for 10 shekels a kilo; they can sell them for eight,” he explained.

“This is happening in the textile industry, with plastics and woodworking,” he continued. “If you go into a furniture store today you’ll see cheap products from Hevron, Shechem and Ramallah.”

“They’re slowly taking over. The Palestinian Authority tries to damage anything linked to Israel… They are subsidizing the goods that are exported to Israel, and dealing a mortal blow to Israeli industry,” he warned.

He called on Bennett to stop products made in PA-controlled regions from entering Israel. “We’re in a situation where the price of production in the territories is 50% less… The salaries, conditions, taxes, rent, are all much cheaper.”

“Because the differences in cost are huge and factories are on the verge of closure, or have shut down production in favor of direct trade with factories in the territories, our request is that they impose a defensive tax, equal to the difference in costs,” he proposed.

If the government does not start taxing PA goods, he warned, “There will be no more factories producing goods in Israel. Any type of goods… We’ll reach a point where we will be completely dependent on them.”

All factory owners are asking for is “an equal opportunity to compete,” he concluded.