Fairness of Taxation As Perceived by Palestinian Manufacturers In the Northern Governorates

Fairness of taxation in Palestine is considered of high importance on the economic and social levels. And due to the importance of the industrial sector and the problems facing the Palestinian economy and industrial sector in particular, this study aimed at identifying the state of reality of fairness of taxation in Palestine, as perceived by the Palestinian manufacturers in the northern governorates of West Bank and the extent of their satisfaction with the enforced tax policies. This study consists of six main chapters. Chapter one dealt with the general framework of the study. Chapter two examined fairness of taxation, its nature, characteristics, types and its relationship with tax evasion. Chapter three was devoted to tax organization of the Palestinian industrial sector's activity, in terms of subjecting the sector's revenues to tax, and the tax characteristics on the sector's profits. Chapter four was devoted to the importance of the tax regime and its impact on the Palestinian industrial firms in terms of tax policies and extent of their treatment of the economic problems, as well as realization of tax fairness among the Palestinian manufacturers. Chapter five, based on field work, dwelt on fairness of taxation as perceived by the Palestinian manufacturers. The last chapter included the conclusions and the study recommendations. After data collection and analysis, it was found that the Palestinian manufacturers were relatively satisfied with the fairness of taxation in terms of tax rates and tax exemptions as stipulated by the Palestinian Tax Law. They were also satisfied with the total expenses on income approved by the law. Pertaining to the mechanism of tax collection and procedures for estimation of income taxes as well as concerning the realization of fairness of taxation, it was also found that the Palestinian manufactures were satisfied with the realization of tax fairness. In the light of the study findings, the researcher recommends intensification of contacts between the tax departments and Palestinian manufacturers to know each other better, thus reinforcing relationships between the two sides. The researcher also suggests that the Palestinian Authority (PA) increase the capacities of small and medium size enterprises through expansion of tax exemptions and lowering of tax rates. This in turn will increase disposable income and this will increase return on investment and give incentives for new investments or expansion and development of current ones. In addition, this step by the PA will improve the projects' competitiveness because tax is considered part of the cost incurred by the producers; therefore lowering high rates of taxes will enable producers to sell at lower prices, otherwise unattainable when the tax rates are high.