Israel’s Diplomatic-Security Cabinet will convene on Wednesday to discuss major slash in the tax revenues that Israel collects on behalf of the Palestinian Authority (PA), claiming that PA pays to terrorists and their families.
The meeting comes amid disagreements over the issue, as far-right ministers demand a large cut up to $140 million a month, while intelligence and military leaders warn that such a move would have repercussions on Israel.
The funds are estimated at $350 million a month and Israeli Ministry of Finance and its tax and customs authorities collect them from businessmen and other sources.
Israel receives up to 3 percent of the collected money for doing it on behalf of PA.
Since far-right took office, the government considers these funds as an Israeli grant, and thus deducts from it as it pleases. Sometimes it deducts to pay Israeli companies’ debts, and others to pay fines to Israeli courts, which do not fairly try Palestinians.
Recently, the government has been trying to withhold taxes and tariffs collected for the PA which disperses payment to Palestinians in Israeli prisons, injured citizens, and families of martyrs.
On the eve of the Israeli elections, there is a growing demand for cutting funds, especially within right-wing parties.
Knesset Foreign Affairs and Defense Committee chairman Avi Dichter expressed satisfaction at the law’s expected implementation, saying that “every shekel the PA transfers to terrorists will be deducted. This is how we create deterrence against terrorism.”
In his capacity as defense minister, Prime Minister Benjamin Netanyahu ordered a report containing precise data to determine the amounts paid by the Palestinian Authority to the families of prisoners and martyrs.
Sources close to the matter in Tel Aviv said the army and intelligence were not keen about deducting funds. They fear that the money cut will create a second economic blow to the Authority after the United States stopped its financial aid, which could lead to a comprehensive economic crisis in the West Bank, thus reflecting a political and security crisis on Israel.
These sources stressed that Netanyahu understands the position of his security services. The PM shares their concerns and worries it will destabilize the PA, as he seeks a way to find balance between the two elements.
"Israeli Prime Minister Benjamin Netanyahu has said in closed-door talks that the deduction will go ahead, although he expressed concern that the reduced tax funds would hurt the stability of the PA; he also said he would look for a way to carry out the demands of the law while ensuring that the PA remains stable,” sources reported.
Based on recent Israeli media reports, the PA paid out some 502 million shekels to families of martyrs and detainees. However, Palestinian sources estimates that no more than 230 million shekels had been paid.
