Israel transfers billions to Ramallah, does not deduct for terror stipends

Israel hands over full NIS 3.7 billion in tax revenues it collects on Palestinians’ behalf, despite law requiring withholding amount PA pays security detainees and families

FILE: Palestinians take part in a demonstration in support of Palestinian prisoners held in Israeli jails, in Gaza City, on April 17, 2018. (AFP PHOTO / MAHMUD HAMS)
FILE: Palestinians take part in a demonstration in support of Palestinian prisoners held in Israeli jails, in Gaza City, on April 17, 2018. (AFP PHOTO / MAHMUD HAMS)

Israel transferred NIS 3.7 billion ($1.12 billion) in tax revenues it collects on behalf of the Palestinian Authority to Ramallah on Wednesday, without deducting the cost of stipends the PA pays out to Palestinians wounded or jailed by Israel for security offenses and the families of those killed, Israeli and Palestinian officials said.

“The Israeli government is transferring all financial dues regarding the tax revenues to the account of the Palestinian Authority, amounting to 3.768 billion shekels,” senior PA official Hussein al-Sheikh wrote on Twitter.

Ramallah has a longstanding policy of compensating Palestinians jailed by Israel for security offenses, as well as those wounded or killed by Israeli forces — including those killed while committing violent terror attacks.

Israel has long sought to clamp down on the practice, which it says encourages terror. A 2018 law requires the government to deduct the estimated cost of the stipends from monthly tax revenues that Israel transfers to the Palestinian Authority. The legislation states that the funds withheld are to be used to support victims of terror attacks.

Then-coordinator of government activities in the territories (COGAT) Maj. Gen. Yoav Mordechai, left, and the Palestinian Authority’s Civil Affairs Minister Hussein al-Sheikh sign an agreement to revitalize the Israeli-Palestinian Joint Water Committee, January 15, 2017. (Courtesy COGAT)

Under the 1994 Paris Economic Protocol, Israel collects over $100 million in taxes on imports and exports and transfers them to Ramallah on a monthly basis. The revenues constituted over 60 percent of Ramallah’s 2019 budget.

Israeli officials with knowledge of the matter confirmed al-Sheikh’s statements. Some funds had been deducted for utilities such as electricity and water, which Palestinians largely purchase from Israel, they said.

But the officials confirmed that no money from the multi-billion shekel transfer was deducted to offset what some Israeli politicians call “terror stipends.”

Deductions for those payments would recommence in January, the Israeli sources added.

The matter made its way to the security-political cabinet in the government for approval on Sunday night. Reports in the Hebrew-language media indicated at the time that the Israeli government had decided to transfer NIS 2.5 billion ($760 million) and deduct around NIS 600 million ($166 million) for the prisoner stipends.

Israeli politicians have described the stipends as a “pay-for-slay” program that rewards attackers. Because the PA hands out more money for longer sentences in Israeli prisons, those incarcerated for the most brutal terror attacks receive more funding from Ramallah.

Members of the Knesset Defense and Foreign Affairs Committee vote in favor of a bill to slash funds to the Palestinian Authority by the amount Ramallah pays out to convicted terrorists, June 11, 2018. (Courtesy)

Palestinians have argued that the stipends are recompense for what they deem an unfair Israeli military justice system. In addition to those who unabashedly support armed terror against Israelis, many do not believe the Israeli version of the events that led to their relatives’ imprisonment or death and take no issue with payouts to them or their families.

From February to October 2019, the PA refused to accept any tax transfers from Israel to protest the deductions, compounding a financial crisis. Ramallah eventually relented as the economic situation deteriorated, but in June again refused to accept any revenues to protest since-shelved Israeli plans to annex parts of the West Bank.

Last month the PA agreed to begin accepting transfers again, following the election of Joe Biden as US president, but some officials had indicated the stipend deductions would again be an issue.

“We consider these deductions illegal, and we shall not accept it, and we shall remain faithful to the families of martyrs and the wounded,” PA government spokesperson Ibrahim Milhem said in a statement on Monday night.

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