Finance minister threatens to withhold tax revenues if Palestinians make UN statehood bid

Yuval Steinitz points at success of freezing assets in preventing similar measure last year

By Ilan Ben Zion 10 November 2012, 4:51 pm Edit

Ilan Ben Zion, a reporter at the Associated Press, is a former news editor at The Times of Israel.

Israel will withhold transferring tax revenues to the Palestinian Authority if President Mahmoud Abbas presses forward with a United Nations statehood bid, Finance Minister Yuval Steinitz warned on Saturday.

Stenitz said that Israel would not collect taxes on the Palestinians’ behalf, nor deliver the moneys to the PA, nor assist Ramallah in economic matters if the Palestinians insist on seeking nonmember observer state status at the UN.

Under the current economic agreements between Israel and the PA, Israel collects customs, border and some income taxes on behalf of the Palestinians and transfers the sums to Ramallah on a monthly basis.

The finance minister noted that the Palestinians backed down from a unilateral UN bid last year after Israel blocked the transfer of Palestinian tax funds to the PA.

Abbas was expected to submit a resolution to the UN General Assembly this month requesting nonmember state status for the Palestinians, but a senior Palestinian official indicated Friday that Abbas may be willing to postpone the move if the US were to offer a “clear objective” for negotiations. According to the official, the objective would have to be a Palestinian state based on 1967 borders, with East Jerusalem as its capital.

Palestinian sources indicated Saturday that Abbas was “seriously considering” pushing back a UN bid, and that the stated reason for a possible postponement — from November to the end of January — is that reelected US President Barack Obama needs time to organize a political agenda for the second term of his administration.