Norway, PA still weighing Israel-approved plan for transferring Palestinian tax revenues
Jacob Magid is The Times of Israel's US bureau chief
WASHINGTON — Norway and the Palestinian Authority have held off on accepting a new framework for Israel to transfer Palestinian tax revenues to the PA, which was approved by Prime Minister Benjamin Netanyahu’s cabinet two days ago.
Norway’s Foreign Ministry says in a statement that it is still discussing the framework, and a PA official speaking tells The Times of Israel on condition of anonymity that Ramallah is also still reviewing the proposal.
The framework would see the Gaza services portion of the Palestinian tax revenues that Israel collects on the PA’s behalf transferred to Norway, which will be barred from funneling them to Ramallah without the approval of far-right Finance Minister Bezalel Smotrich.
The outline was pushed by White House Middle East czar Brett McGurk and US Ambassador to Israel Jack Lew, a European diplomat tells The Times of Israel, lamenting that it gives too much authority to Smotrich, who has long had an adversarial relationship toward the PA.
The diplomat says the PA might be forced to accept the plan, since it is under pressure from the White House and several Arab capitals to end its standoff with Israel and accept the funds in order to be able to at least pay its employees in the West Bank, which it won’t be able to do in one month’s time.
Until November, Israel had been transferring the funds directly to the PA each month in line with the 1994 Oslo Accords, while deducting roughly $13 million each time to compensate for Ramallah’s welfare payments to security prisoners and their families, which Israel says incentivize terror.
After Hamas’s October 7 terror onslaught, the Israeli cabinet voted to deduct a much larger sum of roughly $73 million — roughly 25 percent of the total revenues — from the monthly transfer, which amounts to the funds that the PA uses to pay for services and its employees in Gaza. Israel argued that it would not allow for the revenues to reach the Strip, claiming they could wind up in the hands of Hamas.
The PA responded to the latest deduction by announcing that it would not accept any of the funds if it meant they wouldn’t be able to pay for services in Gaza, daring Israel to allow its financial collapse, given that the tax funds make up roughly 60% of its annual revenues.
Without the PA, Israel would well find itself responsible for providing services for roughly three million Palestinians in the West Bank.
