Israel to deduct a further $198m from PA tax revenue

Israel has only implemented one aspect of a law which saw it deduct $198 million from the PA’s tax revenue with another clause of the legislation yet to be actioned but which could, once implemented, see a further $198 million deducted from the PA’s coffers.

A bill passed last year by the Knesset and approved by the Israeli cabinet earlier this year ruled that Israel could deduct $198 million a year from tax revenue collected on behalf of the Palestinian Authority (PA) 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.

However a second clause in the recently passed law would see Israel deducting a further $198 million the PA’s taxes in order to strip families of Palestinians killed by Israel as well as those imprisoned by Israel of their stipends.

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This aspect of the law requires the Israeli Cabinet to receive a report containing precise figures of the stipends received by families of Palestinians killed by Israel before the funds can be deducted. However, it has not been possible to find an exact number on which to base figures, leaving Israel unable to deduct the funds.

When asked why the second part of the law had not been implemented, Knesset Member Avi Dichter told Israeli newspaper Israel Hayom that they would “overcome the obstacles” and expected to find a figure for the stipends.

Israel has joined the US in its bid to pressure the PA to stop the stipends. Last June the US froze its financial assistance to the PA; 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 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.

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