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Israel to Use Withheld Palestinian Tax Income to Pay Electric Co Debt

Smoke rises from Jenin in the occupied West Bank, during clashes between militants and the Palestinian Authority's security forces, inside the Jenin refugee camp, on January 12, 2025. (Photo by JAAFAR ASHTIYEH / AFP)
Smoke rises from Jenin in the occupied West Bank, during clashes between militants and the Palestinian Authority's security forces, inside the Jenin refugee camp, on January 12, 2025. (Photo by JAAFAR ASHTIYEH / AFP)
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Israel to Use Withheld Palestinian Tax Income to Pay Electric Co Debt

Smoke rises from Jenin in the occupied West Bank, during clashes between militants and the Palestinian Authority's security forces, inside the Jenin refugee camp, on January 12, 2025. (Photo by JAAFAR ASHTIYEH / AFP)
Smoke rises from Jenin in the occupied West Bank, during clashes between militants and the Palestinian Authority's security forces, inside the Jenin refugee camp, on January 12, 2025. (Photo by JAAFAR ASHTIYEH / AFP)

Israel plans to use tax revenue it collects on behalf of the Palestinian Authority to pay the PA's nearly 2 billion shekel ($544 million) debt to state-run Israel Electric Co (IEC), Finance Minister Bezalel Smotrich said on Sunday.

Israel collects tax on goods that pass through Israel into the occupied West Bank on behalf of the PA and transfers the revenue to Ramallah under a longstanding arrangement between the two sides.

Since the Hamas-led attack on Israel on Oct. 7, 2023, triggered the war in Gaza, Smotrich has withheld sums totaling 800 million shekels earmarked for administration expenses in Gaza.

Those frozen funds are held in Norway and, he said at Sunday's cabinet meeting, would instead be used to pay debt owed to the IEC of 1.9 billion shekels, Reuters reported.

"The procedure was implemented after several anti-Israeli actions and included Norway's unilateral recognition of a Palestinian state," Smotrich told cabinet ministers.

"The PA's debt to IEC resulted in high loans and interest rates, as well as damage to IEC's credit, which were ultimately rolled over to the citizens of Israel."

The Palestinian Finance Ministry said it had agreed for Norway to release a portion of funds from an account held since last January with 1.5 billion shekels, calling money in the account "a punitive measure linked to the government’s financial support for Gaza.”

The ministry said as part of the deal, 767 million shekels of the Norwegian-held funds will pay Israeli fuel companies for weekly fuel purchases over the coming months. A similar amount will be used to settle electricity-related debts owed by Palestinian distribution companies to IEC.

Smotrich has been opposed to sending funds to the PA, which uses the money to pay public sector wages. He accuses the PA of supporting the Oct. 7 attack in Israel led by Hamas, which controlled Gaza. The PA is currently paying 50-60% of salaries.

Israel also deducts funds equal to the total amount of so-called martyr payments, which the PA pays to families of militants and civilians killed or imprisoned by Israeli authorities.

The Palestinian finance ministry said 2.1 billion shekels remain withheld by Israel, bringing the total withheld funds to over 3.6 billion shekels as of 2024.

Israel, it said, began deducting an average of 275 million shekels monthly from its tax revenues in October 2023, equivalent to the government’s monthly allocations for Gaza.

"This has exacerbated the financial crisis, as the government continues to transfer these allocations directly to the accounts of public servants in Gaza," the ministry said.

It added it was working with international partners to secure the release of these funds as soon as possible.

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Arab World

Syria Is at a Crossroads: It Can Return to Violence or Transition to Peace, Says UN Envoy 

A member of Syria's security forces mans a gun in the back of a truck during the funeral of three people killed in Israeli strikes a day earlier, in the southern town of Daraa on March 18, 2025. (AFP)
A member of Syria's security forces mans a gun in the back of a truck during the funeral of three people killed in Israeli strikes a day earlier, in the southern town of Daraa on March 18, 2025. (AFP)
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Syria Is at a Crossroads: It Can Return to Violence or Transition to Peace, Says UN Envoy 

A member of Syria's security forces mans a gun in the back of a truck during the funeral of three people killed in Israeli strikes a day earlier, in the southern town of Daraa on March 18, 2025. (AFP)
A member of Syria's security forces mans a gun in the back of a truck during the funeral of three people killed in Israeli strikes a day earlier, in the southern town of Daraa on March 18, 2025. (AFP)

Three months following the overthrow of President Bashar al-Assad, Syria is at a crossroads, the top UN envoy for the country said Tuesday.

Geir Pedersen told the UN Security Council that Syria can return to violence or start an inclusive transition and end decades of conflict.

He said the road back to conflict, fragmentation and violations of Syrian sovereignty by external powers "must not come to pass." The other road, which would restore Syria’s sovereignty and regional security, is "viable," but "requires the right Syrian decisions" and international support, Pedersen said.

Syria’s civil war had gone on for 13 years when a lightning insurgency led by the Hayat Tahrir al-Sham group (HTS) overthrew Assad in December, ending his family’s more than 50-year rule.

Former HTS leader Ahmed al-Sharaa was announced as the country’s interim president after a meeting of armed groups that took part in the offensive.

Pedersen spoke weeks after clashes between Sharaa's security forces and armed groups loyal to Assad - sparked by an ambush by regime remnants on the security forces - spiraled into sectarian revenge attacks that killed scores of civilians, most of them Alawites, a minority sect to which Assad belongs. It was the worst violence since December.

Pedersen told the council that while the situation was "comparatively calmed" after several days, the UN continues to receive reports "of harassment and intimidation, including with heavy sectarian overtones."

He said the interim authorities announced an independent investigation. Pedersen said he stressed that it must be transparent, in line with international standards, and its findings made public.

The UN special envoy, who will be returning to Damascus shortly, highlighted several priority areas for action and attention.

The latest violence, he said, "laid bare the urgent need for credible and efficient accountability for crimes" committed over decades.

He said the UN and the international community will be watching whether the soon-to-be-announced transitional government and transitional legislative council reflect Syria’s diversity and include both men and women.

Pedersen said his team was consulted on a temporary constitution and gave advice on international best practices and norms. "Some of this was taken on board, some was not," he said.

In mid-March, Sharaa signed a temporary constitution that promises to protect the rights of all Syrians for five years during a transitional phase.

"Some Syrians have commended the effort to fill the constitutional vacuum, and noted the incorporation of international human rights norms," Pedersen said. "But others have expressed reservations about the non-transparent process of its drafting and the substance itself — particularly a very strong presidency with unclear checks and balances between state powers and ambiguity regarding the transition steps."

Pedersen also cited other issues that demand action, including dealing with armed groups and foreign fighters, and reviving the economy.