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FINANCIAL NEWS
Palestine to increase taxes, slash spending in 2012
10 Jan 2012
(MENAFN) Palestinian Prime Minister, Salam Fayyad, said that in order to offset a sharp decline in aid donations, during the current year, the Palestinian Authority (PA) would have to increase income tax and slash costs, reported The Jordan Times.
Fayyad added that income tax rates for high earners would be increased to the double to 30 percent from 15 percent, whereas more entities would have to pay tax on their operations.
He also said that government expenditure would be reduced and some of the authority’s 153,000 public sector workers would likely be forced into early retirement, adding that the plan would cut 2012’s deficit to USD750 million.
It is worth noting that in 2010, the PA recorded a deficit of USD350 million, whereas the deficit worsened to USD1.1 billion in 2011, as only USD750 million of planned foreign aid of around USD1 billion arrived to the authority.
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