Palestinian Authority (PA) Prime Minister Mohammed Shtayyeh announced yesterday that civil servants would not be paid at the end of this month due to Israel's refusal to transfer the tax money, Quds Press reported.
Speaking to journalists, he said: "We paid salaries for March and April, we offered assistance to many poor families and we offered loans with interest rates of three per cent, but we will not barter money with politics."
"Our employees are ready to bear the consequences of Israel's withholding of our money. Previously, we remained six months without salaries."
He continued: "We recognised that we suffer from a fragile financial situation after the outbreak of the coronavirus. We do not have financial reserves or national currency. Our corona crisis deepened due to living under the Israeli occupation."
Last week, Palestinian officials revealed that Israel is withholding tax revenues it collects on behalf of the Palestinian Authority for the month of May until the PA reactivates the security coordination agreement with Tel Aviv.
Government spokesman, Ibrahim Milhem said later that the government had rejected Israel's "blackmail".
On 19 May, President Mahmoud Abbas announced the suspension of all agreements signed with Israel including the Paris Economic Agreement, which regulates trade and economic relations between the two parties, in response to Israel's plans to annex nearly 30 per cent of the occupied West Bank to it.