Israel, Palestinians, signed improved economic deal

The deal calls for transfer of goods and tax procedures
 
Israeli Minister of Finance, Dr. Yuval Steinitz, and Palestinian Prime Minister, Dr. Salam Fayyad, concluded last week arrangements with respect to the transfer of goods between Israel and the Palestinian Authority and related tax procedures.
 
The arrangements, which will begin to be implemented on January 2013, are intended to facilitate the implementation of previous agreements in the economic sphere, and in particular the "Paris Protocol".
 
An Israeli finance ministry statement said the sides agreed on steps that would better facilitate the movement of goods between Israel and the Palestinian Authority and reduce illegal trade and tax evasion, measures that could increase revenue.
 
The new measures include the use of advanced technologies that will improve both sides’ monitoring flow of goods as well as the construction of pipelines that will transfer petroleum products from Israel to the Palestinian Authority.
 
According to the arrangements, the tax clearance mechanism regarding Value Added Taxes (VAT), purchase taxes and import taxes will be based on the actual and accurate transfer of goods between Israel and the Palestinian Authority, replacing the current practice of calculating such tax clearances on the reported transfer of such goods.
 
To support these efforts, the Israeli and Palestinian tax authorities will enhance the exchange of information regarding the actual transfer of goods. Further, in order to improve monitoring and ensure efficiency in the movement of goods, advanced technologies will be employed, Palestinian storage facilities will be established, and the transfer of goods will be generally conducted via designated Israeli crossings. In addition, pipelines for the safe and exclusive transfer of petroleum products from Israel to the Palestinian Authority will be constructed.
 
The new arrangements will be monitored by a joint team of experts, comprising of representatives from both parties.