The security cabinet on Sunday approved the withholding of tens of millions of dollars’ worth of tax revenues from the Palestinian Authority as part of the ongoing struggle between Jerusalem and Ramallah over the payment of salaries to attackers and their families.
Israel said it will withhold around NIS 149 million (just over $43 million) from the funds that it collects on the PA’s behalf.
The figure is based on the estimate of the amount Ramallah has paid out to Palestinians killed or injured while engaged in terror activities in 2018 over and above the NIS 500 million ($144,578,030) already withheld over the course of the past year.
That sum covered the money paid to Palestinian prisoners (both incarcerated and released) and their families in 2018.
The NIS 149 million only covers payments made during 2018 and will be withheld from tax transfers made over the course of 2020.
A defense source told The Times of Israel that the the government would begin discussion the withholding of tax funds based on the PA’s 2019 terror payments sometime in the beginning of the new year.
While a law passed in July 2018 called for the withholding of an amount equal to payments to both prisoners and the families of slain attackers, it was only partially implemented in 2019, leading to pushback from the right.
Sunday’s move could raise tensions between Israel and the Palestinians and comes not long after the PA agreed in October to resume accepting taxes collected by Israel following months of declining them in protest over Jerusalem withholding money over the payments.
Ramallah had refused to accept the tax revenues because Israel was withholding part of the sum, but retreated in the face of a burgeoning economic crisis in the West Bank.
As of October, the tax revenue transfers amounted to some NIS 600 million (about $170 million) a month — a key source of financing for the PA.
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.
Last week, Defense Minister Naftali Bennett ordered the seizure of PA funds for families of Arab Israeli terror convicts, declaring that “Jewish blood will no longer be financially lucrative.”