PA’s prime minister says Israel hasn’t transferred any tax revenues for past year

Palestinian Authority Prime Minister Mohammad Mustafa says that Israel has not transferred tax revenues it collects for the PA for the past year, leaving it cash-strapped and unable to pay employees.

Speaking at a press conference yesterday marking the conclusion of the local elections, Mustafa says “the occupation has been cutting our funds for years, but the intensity of the cuts has increased over the past 12 months. In the past year, not a single shekel of tax revenues has been transferred to us. We are living without tax income in an attempt to destroy the institutions of the State of Palestine. All residents are suffering, particularly PA employees.”

The funds in question are tax revenues on goods entering Israel that are destined for the Palestinian Authority. Israel collects these funds and is supposed to transfer them to the PA under the terms of the Oslo Accords. The revenues account for roughly 60 percent of the PA’s income.

On April 19, the Palestinian Finance Ministry announced in an unusual statement that, in light of what it described as Israel “stealing tax revenues” for the past year, all public sector employees would receive only NIS 2,000 for their January salaries, which were paid with significant delay.

Since 2019, Israel has deducted from tax revenues amounts equivalent to the Palestinian Authority’s payments to prisoners and the families of attackers. Since November 2023, following the outbreak of the war in Gaza, Israel has transferred only partial funds, deducting the sums the PA had allocated to Gaza (including salaries for former PA employees and services such as electricity and water). The PA said at the time that it would refuse to accept partial transfers.

Finance Minister Bezalel Smotrich confirms that he has withheld this month’s clearance revenues, totaling NIS 740 million, continuing the policy that has been in place for about a year.

According to a statement from the Finance Ministry, the remaining funds — beyond those allocated to Gaza — “have been frozen for about a year due to the minister’s policy not to transfer funds to the Palestinian Authority in light of its actions against the State of Israel in the international arena and its support for incitement to terrorism.”