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Palestine FM: Government to cut staff pay after Israel tax deduction

Image of Palestinian Minister of Finance and Planning, Shukri Bishara [Utenriksdepartementet UD/Flickr]
Palestinian Minister of Finance and Planning, Shukri Bishara [Utenriksdepartementet UD/Flickr]

Palestinian Finance Minister Shukri Bishara said yesterday that the government will take a series of austerity measures after Israel decided to withhold tax revenues owed to the Palestinian Authority, the Anadolu Agency reported.

Speaking at a joint press conference with Foreign Minister, Riyad Al-Maliki, Bishara said the government will “reduce public spending but will not raise taxes. “We might even consider lowering them [taxes] on locally manufactured goods and products,” he added.

The Palestinian minister explained that the government will pay the salaries of civil servants in the coming months, however, they might be “reduced”, adding that “these are sacrifices that we all have to make”.

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According to Bishara, the government also plans to borrow from local banks, however, it will be cautious. Anadolu quoted a banking source as saying that the Palestinian government has already submitted a formal request to borrow $400 million.

Meanwhile, Al-Maliki said the Palestinian government has officially informed Israel on Wednesday that it will not receive tax revenues if they are incomplete.

On Sunday, the Israeli government said it will withhold 502 million shekels ($138 million) of Palestinian tax revenues. Israel claims the amount is equivalent to the funds the Palestinian Authority pays every month to the families of Palestinians detained in Israeli jails or families of Palestinians killed by Israel.

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