From the Liveblog of
Thursday, August 8, 2024
Smotrich signs off on partial transfer of tax revenues to PA for second straight month
Jacob Magid is The Times of Israel's US bureau chief
Finance Minister Bezalel Smotrich signed off on the partial transfer of Palestinian tax revenues from the month of July, a spokesperson in his office tells The Times of Israel.
This is the second consecutive month in which the Palestinian Authority has received some of its tax revenues after Smotrich refused to make the transfers for several months, bringing Ramallah to the bring of financial collapse.
Israel collects taxes on goods that pass through Israel into the West Bank on behalf of the PA and is required under the Oslo Accords to transfer them to Ramallah on a monthly basis. The tax revenues make up some 70 percent of the PA’s annual income.
Since Hamas’s October 7 onslaught, Israel has refused to transfer the portion of the tax revenues that the PA uses to pay for services and employees in Gaza, claiming that the money could be seized by Hamas. These funds make up some 40% of the monthly transfers.
For several months, Israel agreed to transfer the Gaza portion to Norway, which was to hold on to the funds until Smotrich approved their release to the PA for non-Gaza purposes. That mechanism was abandoned by Israel, though, after Norway recognized the State of Palestine in May along with two other countries.
In addition to not handing over the Gaza portion of the funds, Smotrich also deducted around NIS 100 million ($26 million) over what he asserted was the PA’s incitement to terror, saying that the money would instead be given to the families of terror victims.
The monthly transfer amounted to roughly NIS 470 million ($124.20 million), nearly double the rate of recent months, an Israeli official said, explaining that the two months’ worth of tax revenue transfer that Smotrich approved gave a boost to the Palestinian economy, along with the announcement by the EU that it would be providing $435 million in emergency aid over a two-month period that is conditioned on implementation of a series of reforms, including a revamp of the PA’s controversial prisoner payment system, which is in its final stages.
Smotrich’s decision to sign off on the July transfer also came as Israel reached an agreement with the PA for Ramallah to pay off some NIS 2 billion in debt owed to the the Israel Electric Corporation. The PA has agreed to pay off the debt in monthly sums of NIS 50 million ($13.2 million).
Israel has come under fire from the international community for withholding the PA’s tax revenues, with the US pointing out that these are Palestinian funds that Israel has no legal right to be seizing.
