Norway confirms transferring $114 million in frozen tax funds to Ramallah
Oslo says more funds on the way in coming days, after agreeing to Smotrich’s plan to hold funds previously earmarked for transfer from Ramallah to Gaza
The Palestinian Authority has received NIS 407 million ($114 million) from Israel with more funds on the way “in the coming days,” following a deal to release frozen tax funds via Oslo, the Norwegian government said on Thursday.
Norway on February 18 said it had agreed to assist in the transfer of funds earmarked for the Palestinian Authority that were collected by Israel but withheld over Jerusalem’s refusal to transfer money destined for Gaza following Hamas’s October 7 terror onslaught.
Israel argued the portion of the funds that Ramallah uses to pay for services and employees in Gaza — roughly NIS 260 million ($73 million) monthly — could wind up in the hands of Hamas, the terror group it has vowed to eliminate.
The PA has refused to accept any of the tax revenues unless amounts for Gaza were included, leaving it without the vast majority of its annual budget. Unable to pay employees in full for months, the move put the PA at risk of complete financial collapse until Norway approved an Israeli plan to serve as an intermediary.
“This money is absolutely necessary to prevent the collapse of the Palestinian Authority, to ensure that the Palestinians receive vital services, and that teachers and health workers are paid,” Norwegian Prime Minister Jonas Gahr Støre said on Thursday.
Under interim peace accords reached in the 1990s, the Finance Ministry collects tax on behalf of the Palestinians and makes monthly transfers to the PA.
Israel collects taxes on goods being imported to the Palestinian territories via Israeli territory, taking a 3 percent commission before transferring the rest to the PA. Israel controls all the frontiers of the Palestinian territories, bar the Rafah crossing between Egypt and the Gaza Strip.
Under the agreed solution, approved by the cabinet last month, the Gaza portion of the funds are transferred to Norway, which is required to hold onto the funds until Finance Minister Bezalel Smotrich signs off on their release to the PA.
The cabinet decision bars those funds from ever being sent to Gaza and risks the permanent cessation of all future transfers if that restriction is violated.
War erupted in Gaza after Hamas’s October 7 massacres in southern Israel, which saw thousands of terrorists burst across the border, killing some 1,200 people and kidnapping another 253, mostly civilians.
Vowing to destroy the terror group and return the hostages, Israel launched a wide-scale military operation in Gaza, now in its fifth month.
Jacob Magid contributed to this report.
