Cabinet okays tax revenues transfer to Abbas, holds back some for ‘pay to slay’

The security cabinet authorized late Sunday the transfer of some NIS 2.4 billion ($725 million) in tax revenues that Israel collects on behalf of the Palestinians after the Palestinian Authority decided to renew cooperation earlier this month.

However, the ministers also decided to withhold some NIS 600 million ($181 million) to compensate for the PA’s so-called “pay to slay” payments — the payment of salaries to terrorist attackers and their families.

As part of the Oslo Accord agreements between Israel and the Palestinians, Israel collects tax revenues on behalf of the Palestinian Authority. But, the PA announced in early June that it would refuse to accept the monthly transfer of over $100 million as part of ending coordination with Israel. The revenues constituted over 60 percent of Ramallah’s 2019 budget.

The PA cut off relations in protest of a since-shelved Israeli plan to annex parts of the West Bank.

In this file photo taken on June 19, 2020, Palestinian demonstrators carry banners during a protest against Israel’s plan to annex parts of the West Bank, near the city of Ramallah. (ABBAS MOMANI / AFP)

The refusal to accept the money sparked a six-month-long crisis that saw coordination between Israel and the Palestinians collapse and hundreds of thousands of Palestinian civil servants go without their salaries.

With the PA facing a massive fiscal crisis, hundreds of thousands of public-sector employees — some 15 to 20 percent of the PA’s economy, according to an assessment by the World Bank — did not receive full salaries for nearly five months.

The decision to renew ties came after the US presidential election was won by Democratic challenger Joe Biden, who Ramallah anticipates will prove more empathetic to their cause than President Donald Trump. The PA severed all dealings with the Trump administration three years ago after he recognized Jerusalem as Israel’s capital and moved the US embassy there.

Palestinian officials are reportedly changing strategy following Biden’s victory, in an effort to reverse the harsh punitive measures the Trump administration applied to Ramallah.

It is also considering reforming its controversial policy of paying salaries to Palestinians convicted by Israel of security offenses and terrorism. The prisoner issue has long hampered the PA’s diplomatic efforts in Washington, and Israel has repeatedly invoked the terror funding to criticize Ramallah in international forums.

Israel passed a law in July 2018 that called for the withholding of an amount equal to payments to both prisoners and the families of slain attackers

The NIS 600 million figure is based on the estimate of the amount Ramallah has paid out to Palestinians killed or injured while engaged in terror activities since 2019, the Haaretz daily reported.

Israel says the so-called Martyrs’ Fund rewards and encourages violence, while the Palestinians say it is a way to provide for needy families affected by the decades-old conflict.