GAZA — Hamas is struggling to meet its payroll in the Gaza Strip, where income from taxes has been badly hit since neighboring Egypt started destroying a network of tunnels used to smuggle food, fuel and weapons into the Islamist-run enclave. The crisis means that Gaza's thousands of civil servants may not receive their full salaries in time for an important Muslim holiday next week. Egypt, which accuses Hamas of aiding militants in the lawless Sinai desert, has been waging a campaign to destroy the smuggling tunnels that delivered weapons and other goods to the Gaza Strip, which is partially blockaded by Israel. Hamas, which denies the Egyptian allegations, taxes the traffic through the tunnels - a money stream that has now virtually run dry. Last month, the Hamas government paid only 77 percent of its $25 million August payroll for Gaza's 50,000 civil servants. It said on Tuesday it would make a special payment of 1,000 shekels ($280) to the employees on Thursday before the Eid Al-Adha holiday. There is still no word on whether full September salaries will be paid this month. “What is supposed to be a day of joy and happiness would turn into a nightmare, a disaster, because we cannot afford to feel happy,” said 47-year-old public servant Mohammad Khalil. During Eid Al-Adha, Muslims traditionally slaughter sheep or cattle and share the meat with the poor. Many parents buy new clothes for their children. Khalil, a father of six, told Reuters he received most of his 1,700 shekel salary for August, but it was not enough to enable him to pay his electricity or water bills. Uneasy relationship Hamas, an offshoot of the Muslim Brotherhood, has governed Gaza since 2007 and has an uneasy relationship with Egypt's new army-backed leadership, which toppled the elected Islamist president, Mohammad Morsi, a Hamas ally, in July. It is unclear exactly how much money Hamas used to take in from tunnel traffic. Economists in the Gaza Strip said the income covered 70 percent of the government's monthly budget. Hamas officials put the figure at 40 percent. Some one million liters of petrol used to reach Gaza daily through the tunnels from Egypt. Hamas collected 1.60 shekels per liter. Cement once came through at a rate of 3,000 tons a day. Hamas's cut was 20 shekels per ton, according to tunnel operators and local economists. Ala Al-Rafati, the Hamas-appointed minister of the economy, said up to 90 percent of the tunnels had now been destroyed by the Egyptian army and those still open were not operating fully. He put the losses to the Gaza economy since June at $460 million. He added that the Gaza government's annual budget was more than $700 million, with $260 million devoted to running costs. Cairo's closure of the tunnels over the last three months has caused prices to spike and production to drop at factories dependent on raw materials from Egypt. Gaza economist Maher Al-Tabaa' said that for Hamas, this translated into “no taxes on smuggled goods and may soon mean no taxes on locally manufactured products.”— Reuters
