Palestinian Finance Minister Shukri Bishara announced that the government would only pay 50 percent of salaries for its employees for the months of May and June, with a minimum of 1,750 shekels.
This will affect thousands of workers as the Palestinian Authority (PA) refuses to receive its taxation revenues from Israel.
The transfers, about USD190 million a month, make up more than half of the PA's budget and stem from duties on imports that reach the West Bank and Gaza via Israeli ports. The PA snubbed the taxes after declaring bilateral agreements with Israel null in May.
Bishara pointed out that the PA is currently faced with three financial challenges; the first one resulting from the Palestinian leadership’s protest against Israel’s annexation move, the second resulting from Israel’s attempts to sue Palestinian banks, and the third is the outcome of grappling with the economic consequences of the coronavirus pandemic.
“In June, the PA received zero clearance funds at a time when local revenues declined by 280 million shekels. Besides, the PA did not receive 100 million shekels in external financial aid, a situation which resulted in the PA not receiving 380 million shekels in revenues,” said the Minister.
In terms of the monthly expenses, Bishara pointed out that they totaled 760 million shekels, including 550 million shekels accounting for the minimum public wages besides 210 million shekels in other expenses, particularly health expenses following the coronavirus outbreak.
The resulting government budget gap was covered through a bank loan of 250 million shekels, he stated, adding that those whose salaries are below 1,750 shekels will be fully paid, and those whose salaries are above it will receive 50 percent of their salaries.
Bishara said that the payment of fifty percent of salaries will continue in the coming period "as long as the tax revenues crisis continues." Yet, he added that in case more funds were available, a greater percentage of the salary would be paid next month.
