![A worker walks at the site where a new electricity plant will be built in Jalamah, near the West Bank town of Jenin, following the signing of a new contract on July 10, 2017. [Photo credit should read JAAFAR ASHTIYEH/AFP via Getty Images]](https://i0.wp.com/www.middleeastmonitor.com/wp-content/uploads/2020/02/GettyImages-811784026.jpg?fit=1200%2C800&ssl=1)
Israel and the Palestinian Authority (PA) have agreed to release $500 million in Palestinian tax revenues to pay for electricity and fuel supplied by Israel, following months of US-mediated negotiations.
According to the Times of Israel, the deal addresses tax funds Israel collects on behalf of the PA, which had been withheld since October 2023.
Israel justified the freeze by claiming funds used for Gaza services could benefit Hamas. In response, the PA refused to accept any tax revenue transfers, deepening its financial crisis and jeopardising its ability to pay government workers’ full salaries for months.
Far-right Israeli Finance Minister, Bezalel Smotrich, announced yesterday that Israel will redirect the withheld tax revenues to cover a two billion shekel ($544 million) debt owed by the PA to the state-run Israel Electric Corporation (IEC).
READ: Report: Israel withholds $1.8bn in Palestinian tax revenues
“The PA’s debt to IEC resulted in high loans and interest rates, as well as damage to IEC’s credit, which were ultimately rolled over to the citizens of Israel,” he claimed.
אחרי 15 שנה הרשות הפלסטינית תחזיר מיליארדי שקלים שהייתה חייבת לחברת החשמל. התעקשנו וזה קרה.
במקום כסף למימון הטרור בעזה – כסף שיחזור אליכם אזרחי מדינת ישראל 🇮🇱 pic.twitter.com/XjzwdzWo77
— בצלאל סמוטריץ’ (@bezalelsm) January 12, 2025
The Palestinian Finance Ministry said it had agreed to allow Norway to release a portion of funds from an account holding 1.5 billion shekels since January. The ministry described these funds as a “punitive measure linked to the government’s financial support for Gaza.”
Israel often uses its power over the Palestinian tax revenues as a means of collective punishment against Palestinians, including withholding funds or deducting some to compensate settlers allegedly harmed by the Palestinian resistance.
Israel collects about $188 million in Palestinian tax revenues each month and deducts three per cent for “operational fees.”
Palestinians receive no compensation following settler attacks on their property or when they are forcibly evicted from their homes and property by Israeli occupation forces or settlers.
READ: Palestinian Authority bans political analysts from appearing on Al Jazeera
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