Weaknesses in Palestinian Income Tax System: Reasons and Possible Remedies

Abstract

Since 1994 the year of Palestinian Authority establishment, Palestinian public budget suffered from a large deficit which affects negatively on its financial power to pay its obligations. According to the budget of Palestinian Authority in 2010, income tax revenues represent about 3% of GDP and only about 8 % of total tax revenues. Therefore, this paper tried to discuss the main reasons behind the weaknesses in Palestinian income tax revenues in the view of tax administrators and tax officers using descriptive survey methodology by preparing a detailed questionnaire contain 26 paragraphs tried to find an interpretation to the problem of this study, this questionnaire distributed to a sample of 60 tax administrators were working in tax administrations in different cities of Palestine Our finding shows that the main reasons behind weakness in Palestinian income tax revenues are due to the followings: weaknesses in income tax control system, low level of income in Palestine, lack of tax and nontax incentives.