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Israel to withhold $180m of Palestinian tax funds

July 12, 2021 at 4:08 pm

A Palestinian man counts his notes on 8 September 2011 [Abed Rahim Khatib/ApaImages]

Israel will withhold $180 million in tax transfers to the Palestinian Authority (PA) to offset money transfers going to families of Palestinian prisoners and martyrs, the Israeli cabinet announced yesterday.

According to Wafa news agency, the decision to freeze the funds came after a report from Israel’s Defence Ministry that the PA transferred $180 million “in indirect support of terrorism in 2020.”

The Israeli prime minister’s office said the funds “will be frozen on a monthly basis out of the payments that Israel transfers to the Palestinian Authority.”

Palestinians view the martyrs’ fund as necessary anti-poverty assistance for the families of Palestinians imprisoned or killed by Israel each year.

Israel has intensified its crackdown on Palestinian banks in order to monitor money transfers to the families of Palestinian prisoners.

This is not the first time the Israeli security cabinet has held back tax funds it collects for the PA to penalise it for payments to families of Palestinian prisoners and martyrs.

READ: PA finance minister says Israel restricts 60% of revenue collection

Last year, Israeli Defence Minister Benny Gantz signed four orders to seize money transfers going to families of Palestinians serving prison sentences in Israeli jails.

Palestinian Prime Minister Mohammad Shtayyeh denounced the latest Israeli move, reported Wafa, calling it an “illegal measure that violates the signed agreements and international laws”, pledging to take whatever measures necessary to address the decision.

“This issue will place us in a difficult financial position, particularly that no donor aid was disbursed this year,” he said.

“In order to fulfill our financial obligations towards Gaza Strip, Jerusalem, and Area C, we will be obliged to take bank loans, which represents an abnormal and an unsustainable situation,” he added.

He also called on the international community to intervene and stop the “unfair” tax cuts noting that since 2019, Israel has deducted nearly 851 million shekels ($260 million) from the tax revenues collected on behalf of the PA and will deduct a further 51 million shekels ($15.5 million) starting next month.