Israel again turns down US request to transfer tax money collected in Palestine

Israel’s Finance Minister Bezalel Smotrich on Friday once again turned down US request to transfer tax money collected by Tel Aviv to the Palestinian Authority as the allies remain divided on the issue, Anadolu Agency reports.

Not a single shekel (Israeli currency) will be sent to Gaza as long as “I am Finance Minister,” Smotrich said in a statement.

He has a high respect for the US, whom he describes as Israel’s best ally in the world, but the minister said, “We will never abandon our fate to others.”

“This is not an extremist position. This is a position which desires life, and which is required by the situation,” the right-wing minister added.

Since the start of the Israeli war on Gaza on 7 October, Smotrich repeatedly voiced absolute rejection of fully transferring the Palestinian taxes that Israel collects for the Palestinian Authority.

In November, he conditionally approved the transfer of taxes to Palestinians by deducting the amount allocated to Gaza by the Palestinian Authority.

On Thursday, the American Axios website reported that US President Joe Biden had “a difficult conversation” with Israeli Prime Minister Benjamin Netanyahu about withholding part of the tax revenue of the Palestinian Authority.

Axios cited a US official, who said the US administration is concerned that “an economic collapse of the Palestinian Authority could lead to a violent escalation in the occupied West Bank as a result of it not being able to pay its security forces their salaries.”

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 and Israel in return earns a commission of 3%.

The revenues are estimated to total around $188 million every month and represent the main source of income for the Palestinian Authority.

The Palestinian government uses these funds to pay the salaries of public employees and retirees, who number 140,000 and 53,000, respectively.