Israel approves tax transfer to PA, deducts Gaza's share

The Israeli security cabinet made the decision yesterday to release frozen tax funds to the Palestinian Authority (PA), while withholding the funds allocated for Gaza, reported The Times of Israel.

The move received support from security officials and Washington, both of which regarded the fund transfer as essential to bolster the Palestinian Authority’s standing in the Occupied West Bank, positioning it as a more moderate entity, compared to extremist groups.

A statement from the Israeli Prime Minister’s Office on Thursday night specified that the security cabinet had voted to “withhold” the funds designated for Gaza, including the funds continually withheld to offset the money the Palestinian Authority provides to families of Palestinian prisoners and martyrs.

“Israel is cutting all contact with Gaza,” the statement read. “There will be no more Palestinian workers from Gaza [in Israel], and the workers who were in Israel at the start of the war will be returned to Gaza.”

Moreover, the IDF has been detaining Gaza labourers with legal work permits for Israel since the war began on 7 October. The precise count of those held is uncertain; however, the number of detainees ranges from hundreds to potentially several thousand and there is no clear plan for returning  them to Gaza, as all border crossings between Israel and the Strip have been closed throughout the conflict.

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The decision to release frozen tax funds to the PA came despite Israeli Finance Minister, Bezalel Smotrich’s earlier call this week to suspend the transfer of customs duties collected by Israel, alleging PA support for the 7 October attack.

However, Israeli Defence Minister, Yoav Gallant, claims that it was in Israel’s best interest to transfer the funds.

“It is appropriate to transfer, and transfer immediately, the funds to the Palestinian Authority so that they will be used by its forces who help prevent terrorism,” Gallant said at a press conference on Wednesday.

The tax revenues – known in Palestine and Israel as maqasa – are collected by the Israeli government on behalf of the Palestinian Authority on Palestinian imports and exports. Israel, in return, earns a commission of 3 per cent of collected revenues.

The tax revenues collected are estimated at around $188 million every month, for which tax revenues represent the main source of income for the Palestinian Authority.

Meanwhile, nearly 10,600 people have been killed in the conflict, including 9,061 Palestinians and more than 1,538 Israelis. Basic supplies are running low for the 2.3 million residents in Gaza due to the Israeli siege, in addition to the large number of casualties and displacements.

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