Israel decides to transfer a month's worth of tax revenue owed to the PA

Highlighting that Israel has turned the tax money it collects for the Palestinian Authority (PA) into a means of exerting continuous pressure on it, “Haaretz” newspaper reported that Israel has decided to transfer the tax money for only one month. This follows the freezing of all transfers since the beginning of November 2012. According to the Israeli Prime Minister’s office, the decision has been made for a one-time transfer, and the situation will be reviewed for every transfer.

Israel withheld the transfer of tax money collected for the Palestinian Authority in the wake of the UN vote to recognize Palestine as a non-member state.

---

A source from the Israeli Prime Minister’s office was quoted on Tuesday night as saying that the PM, Benjamin Netanyahu, had decided to transfer the tax funds collected during December of last year.

The source was also quoted as saying that the decision was taken just this once due to the difficult economic situation of the Palestinian Authority, and that the matter would be studied again next month.

The newspaper also added that two professional members of staff from the Israeli and Palestinian Ministries of Finance are scheduled to meet today in order to compare data and determine the amount to be transferred. It is predicted that the amount will reach about NIS 400 million.

The amount frozen in the last 2 months reached about NIS 800 million, which Israel seized and transferred to the electric company to pay off the amount the PA owned the company, as well as other Israeli institutions.

Meanwhile, the Palestinian Authority has been facing a difficult economic situation for several months, and is finding it hard to pay the salaries of public sector workers, including the security services employees. The crisis escalated with Israel’s decision to suspend the transfer of tax money and the decline of financial support from donor and Arab countries.

“Haaretz” also mentioned that Israel had faced intense international pressure over the last few weeks to transfer the funds. In addition, during internal discussions, Israeli security services recommended the transfer tax funds in order to prevent the collapse of the PA and avoid affecting the performance of its security services.

Moreover, the United States continues to prevent the transfer of a few hundred million dollars from the US government to the PA due to the Palestinian efforts at the UN. On the other hand, some European countries have recently transferred funds to the PA to stabilize its economic status, along with the transfer of $100 million from Saudi Arabia and $20 from Algeria.

In accordance with the Paris Convention of April 1994, Israel collects tax funds on border crossings and transfers them to the PA monthly. Therefore, Israel has no legal right to withhold tax money transfers from the PA. However, heads of the Israeli government and ministers of finance have regularly withheld the transfer of tax revenue. For instance, Ariel Sharon withheld transfers for 2 years after the outbreak of the Second Intifada, and Israel froze transfers after the Palestinian elections from February 2006 to July 2007.