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Hamas $200m poorer as smuggling tunnels close

February 10, 2014

The New York Times reports that Egyptian closures of tunnels used to smuggle weapons and merchandise into Gaza has resulted in a loss of nearly $200 million to Hamas, which taxes goods that are smuggled through the tunnels.

Previous news reports have indicated that Hamas’s taxes on the underground trade grew and became formalized within the past few years, and that the terrorist organization made a million dollars a day in early 2013 by levying taxes on smuggled products.

Thanks to Sal for sending this over:

As Gaza Tunnels Closed, Hamas Lost Cash, Israeli Official Says

TEL AVIV — Hamas, the Islamic militant group that controls Gaza, is in severe economic straits, having lost a major source of income in recent months because of an Egyptian clampdown on hundreds of smuggling tunnels, a high-ranking Israeli military official told reporters at army headquarters here on Thursday.

Dozens of tunnels running beneath Gaza’s border with Egypt are still operating, he said, but the $200 million that Hamas collected annually in tax revenues from the tunnel trade has been reduced to a few million dollars at most.

The Israeli official, from the military’s southern command, which deals with Gaza and Israel’s border with Egypt, was speaking on the condition of anonymity in line with military protocol.

A variety of goods, including cheap flour, subsidized Egyptian fuel and building materials, had flowed into Gaza through the tunnels, as well as weapons and operatives, he said, describing the tunnel system as Gaza’s economic lifeline. More goods are being imported from Israel, but at a much higher cost.

The tunnel clampdown began over the summer, when the military in Egypt ousted President Mohamed Morsi of the Muslim Brotherhood, who was Hamas’s most important ally. The Egyptians acted against the tunnels because of what they saw as their own security interests, the Israeli military official said.

Isra al-Modallal, a spokeswoman for Hamas, said Gaza had suffered overall losses of more than $500 million in all sectors because of the closing of the tunnels, but she could not provide a figure for how much Hamas had lost in tax revenue. The amount of goods entering Gaza through the tunnels has been cut by 95 percent, she added…

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