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Income Tax Law and Relevant Amendments

Birzeit University- The Institute of Law (IoL) in collaboration with the Faculty of Law and Public Administration (FLPA) at Birzeit University held on Tuesday, 17 March 2009, a legal encounter entitled: “Income Tax Law and Relevant Amendments”. IoL hosted Mr. Jihad Zumari General Director of the Income Tax Departments at the Ministry of Finance (MoF), to present a lecture on the Income Tax Law of 2004 and its relevant amendments.

Dr. Ghassan moderated and commenced the encounter by stressing on the importance of addressing the issue of income tax, which constitutes the backbone of Palestinian economic life, and engages the Palestinian citizens in the development process instead of relying on foreign donations and funds, and thus it was imperative to establish an Institutional –legal system to enhance the role of the income tax.
For his part, Mr. Zumari made a brief presentation on the importance of the topic, highlighted the development process of the Palestinian Income Tax Law of 2004. Mr. Zumari presented a historical overview of the laws relating to taxation in Palestine, and the consequences of the implementation of the Jordanian law No. 25 of 1964 in the West Bank and the Egyptian law No. 17 of 1947 in the Gaza Strip, pointing out that these laws remained in force until 31 October 2004, when the Palestinian authority issued Law No. 17 of 2004.
Mr. Zumari stated various innovations on the 2004 law, also addressed many of the issues that did not have explanations in the previous laws, reviewing some of these amendments, which have contributed to the reduction of tax on the salaries of the employees and reduced the jurisprudence and legal interpretations of certain articles of the law, as an example, one of the amendments to the tax law, reduced the tax bracket the natural person to become a tax (5% -10% -15%) instead of (8% -11% -16%), and amended tax imposed on life insurance companies.
With regard to tax deductions at source for payments, Mr. Zumari highlighted the legal distinction between the resident to the non-resident person which is 10% of the value of payment instead of 16 %. In addition, the law of 2004 raised the expenditure ceiling of acceptable tax deductions for the purpose of income tax.
Mr. Zumari, concluded by demonstrating the laws treatment in respect of the expenses of training at institutions, and expenditures on research and development, scientific research and partnership with scientific institutions and other adjustments.
It should be noted that 107 participants from public and private sectors attended the foregoing meeting.
The Legal Encounters Programme is organised in partnership with the Konrad Adenauer Stiftung.