The Israeli government began to offer a number of economic facilities to the Palestinian Authority, lately approved under heavy pressure from Washington.
Israeli newspaper Israel Hayom reported on Sunday that Israel has recently slashed the gasoline tax it had been collecting from the Palestinian Authority by 50%, and has taken other measures to ease the financial situation in Ramallah.
Israeli authorities decided to collect a 1.5% gasoline tax instead of 3% from the PA, a measure that will save the Authority some 80 million shekels ($20 million) on an annual basis, according to the newspaper.
In 2023, the Israeli cabinet had taken other steps to support the Palestinian Authority's economy. These efforts include increased tax payments in favor of the PA, which now average 730 million shekels per month, compared to around half a million three years ago.
Early this year, the cabinet had announced it approved lowering the so-called “blue tax” that it levies from the PA on fuel transfers from three percent to 1.5%; raising the percentage of revenues it transfers to Ramallah from the fees it collects from travelers at the Allenby border crossing between the West Bank and Jordan; and expanding the list of tax-free imports that it facilitates on the PA’s behalf.
The Israeli government has only implemented the preliminary measures, while it said the list of tax-free imports will be updated later through the Israeli-Palestinian Joint Economic Committee.
The Committee was established under the Oslo Accords, with an aim to regulate the economic relations between Israel and the PA.
It has not convened since 2009, as a result of the political tension between the parties
The PA demands that Israel implements all three measures. Israel had previously refused, but lately accepted under ongoing pressure from the administration of US President Joe Biden.
Israeli officials said that Israeli far-right ministers, like Finance Minister Bezalel Smotrich, who oversees the Tax Authority and the Civil Administration in Israel, also approved this decision. They said the move aligns with the Biden administration's call to improve the economic situation in the Palestinian Authority, which is believed to be on the brink of economic collapse.
The three measures could add millions of dollars to the coffers of the PA, currently going through a deteriorating financial crisis, the worst since its establishment.
For the second consecutive year, the Palestinian Authority is paying partial salaries to most of its employees due to the crisis.
Last July, Prime Minister Benjamin Netanyahu's cabinet decided that Israel would work to prevent the collapse of the PA.
The Israeli government withholds huge amounts of money in tax revenues on the PA’s behalf and hands them to the families of Israelis killed in Palestinian attacks.
