In a new financial clampdown, Israeli Finance Minister Bezalel Smotrich on Sunday pushed for additional deductions from Palestinian tax revenues, Israeli Army Radio reported.
Smotrich instructed an electricity company supplying energy to the Palestinian Authority (PA) to adopt advanced technological methods to measure the precise amount of power delivered to PA areas.
The report said the new measures will replace previous calculations which were based on “estimates.”
It noted that until recently, Israel collected around 35 million shekels per month for electricity, while the amount now ranges between 50 and 70 million shekels monthly.
Israeli sources said this measure is part of Smotrich’s declared plan to weaken the Palestinian Authority and push it toward collapse.
The Israeli minister leads consistent efforts aimed at dismantling the PA and annexing 82% of the West Bank to Israel. Smotrich has vowed to “bury the idea of a Palestinian state.”
In the last four months, Smotrich has withheld hundreds of millions in tax revenues collected by Israel for the PA. He has also moved to cut Palestinian banks off from the Israeli financial system, though the Cabinet has yet to approve that step.
Meanwhile, the Authority has begun to show “signs of collapse” as a result of its economic crisis.
For the past two years, the PA has been unable to pay full wages of its employees. Also, the PA decided not to open the school year on Sept. 1 because of its inability to pay teachers' salaries.
The situation has gotten US ambassador to Israel Mike Huckabee to express concern about a possible PA collapse.
On September 7, the PA Finance Ministry announced that June salaries would be paid that same day, but only at 50%, with a guaranteed minimum of 2,000 shekels (roughly $600) per employee.
About 65% of the PA’s budget comes from so-called clearance revenues, or tax transfers collected by Israel on its behalf under a 1994 agreement.
Over the past five years, Israel has deducted around 500 million shekels ($150 million) annually from these revenues. That number is based on the amount it says the PA continues to pay to security prisoners and their families.
Since the Hamas-led October 7, 2023 attack, Israel has withheld additional PA revenues. It no longer transfers the monthly sums the PA once directed to Gaza, including pensions for ex-employees who served under the PA, and payments for electricity and water supplied to the Strip.
The PA’s prime minister, Mohammad Mustafa said for the fourth month in a row, no funds have been transferred. As a result, 10 billion shekels belonging to the PA is in Israel’s hands.
Israel’s Finance Ministry told The Times of Israel the matter falls under the direct authority of Smotrich. His office did not respond to a request for comment.
