JERUSALEM, March 13 (JMCC) – Disparities in Israeli tax collection are weighing down local businesses, say Palestinians.

An estimated 250 stores in Jerusalem’s Old City -- one-quarter of all its shops -- have closed down in recent years.

“The secret behind the city’s permanence through the decades has been its economy,” said attorney Khaled Zabarqa.

“The Israeli occupation deliberately directs hard blows to the economy with the intent of bringing the city to its knees and displacing its residents.”

SHARING COSTS

Zabarqa was speaking at a conference held to brainstorm how local merchants can work together to resist what they say are unfair tax regulations.

One idea that attendees discussed was sharing the cost of imports to cut individual shipping costs.

Other proposals included the filing of lawsuits to force the city to provide street lights and parking in key spots.

DISPARITY AND DISSENT

Palestinians boycott local government elections in Jerusalem, and are unrepresented in city hall.

Merchants in Jerusalem’s impoverished Old City pay the same tax rates as merchants in the swank mostly-Jewish Rahavia neighborhood.

Thirty-five percent of land taxes are collected in the eastern Arab neighborhoods of Jerusalem, while only five percent of municipal revenues are spent on services in the same areas, say Palestinians.

KEEPING UP

The outbreak of the Palestinian uprising in 2000 deeply damaged the Jerusalem economy, as tourists stopped visiting the city. A recent revival in tourism has helped, but Palestinians still struggle to pay city fees.

Those who can’t pay the taxes are prosecuted, and sometimes slapped with retroactive fines that can reach hundreds of thousands of shekels.

Merchants are forced to navigate a tax system that they don’t trust in the unfamiliar Hebrew language. Many have given up keeping tax records at all.

“Market traffic has been redirected to Israeli markets in West Jerusalem,” said Zabarqa.