The Israeli cabinet yesterday approved a bill to deduct $138 million from the Palestinian Authority (PA)'s tax revenue in a bid to stop prisoners' stipends.
Israel collects customs duties on behalf of the PA under the interim agreements of the Oslo Accords – sums thought to amount to $222 million a month. Yesterday's decision will see over 500 million shekels ($138 million) deducted from the PA's revenue in order to strip those Palestinians killed, wounded or arrested by Israel of their stipends, Quds Press reported.
The Israeli cabinet said in a statement that it had decided to implement the decision following a resolution which was approved by the Knesset in 2018. The cabinet added that it had also instructed the defence establishment "to examine further payments that the PA pays in connection with terrorism".
Israel's Justice Minister Ayelet Shaked hailed the move, telling Israel's Reshet 13 TV that "Abu Mazen [PA President Mahmoud Abbas] continues each month to transfer fat salaries to murderers who are in prison," adding: "We must find a way of stopping this money."
Palestinian leaders however slammed the decision, with senior Palestine Liberation Organisation (PLO) official, Wasel Abu Youssef, telling Reuters the move was "an attempt to pressure us and blackmail us". Abu Youssef added: "Even if left with just one dollar, we will pay it to the families of the martyrs, of the prisoners and of the wounded."
Speaking to Israeli public broadcaster Kan, Palestinian Prime Minister Rami Hamdallah said the move amounted to the "theft of Palestinian public money" and showed "Israel's enactment of racist laws in support of the occupation, which undermines the two-state solution". Hamdallah also warned that "this could jeopardise the Palestinian economy and undermine the PA's ability to pay its salaries on time".
Earlier this week, the PA threatened to refuse customs duties altogether if Israel pressed ahead with its decision to make deductions. Senior official of Fatah – the Palestinian faction which dominates the PA – Hussein Al-Sheikh, blamed the US for Israel's decision, revealing that international financial institutions and banks had begun imposing a financial siege on the PA at the US' request.
The US has been at the forefront of bids to pressure the PA to stop the stipends. In June the US froze its financial assistance to the PA in a bid to stop the payments; a move copied a month later by Australia, which stopped all direct aid to the PA citing concern over what it called "martyr payments". The United Nations has since warned that the PA could collapse if these parties continue to apply financial pressure, cautioning that such moves could push the already cash strapped authority to "breaking point" and cause a complete "system failure" in the occupied West Bank.