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Rescue De-fuses Vat Opposition

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The spectacular Uganda rescue over the weekend provided Israeli authorities with an unexpected dividend on the domestic scene. It completely overshadowed public displeasure with the new value added tax (VAT) and seems to have de-fused what might have been a new wave of violent disturbances on the West Bank.

When VAT took effect last Thursday it went almost unnoticed because of national concern with the fate of more than 100 hostages held by hijackers at Entebbe Airport. When the hostages were rescued, elation was such that any protest against the levy would have been unseemly.

The situation on the West Bank remained calm after an outburst of rioting last Thursday in which an 18-year-old Arab was killed by security forces who used tear gas for the most part to disperse the rioters. A general strike by East Jerusalem and West Bank merchants last Thursday’ to protest new taxes has not been repeated.

Israelis are unhappy with VAT because it means higher prices and fewer imported goods. The West Bank Arabs for their part, seem to need very little pretext to disturb the peace. They called strikes and rioted over VAT just as they rioted earlier over Jewish prayer on the Temple Mount, Israeli settlement policies and the government’s decision to expropriate land in Galilee.

Israel has not, in fact, imposed the VAT in the administered territories where the laws of Jordan, Egypt or Syria have been retained. But the government has raised duties on basic goods imported into the territories such as gasoline, by eight percent, the equivalent of VAT. This was done to prevent the creation of a market in the territories that would have sold products much cheaper than in Israel proper.

In response to protests by the local Arab chambers of commerce, the Israeli Treasury postponed the new taxes until Aug. 1. At the same time, sales taxes were not reduced as they were, inside Israel to compensate for VAT. The Arabs responded with the general strike and disturbances last week. The calm that prevails now is attributed by Israeli circles to respect gained by the security forces because of the successful rescue operation in Uganda.

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