Cash-strapped PA accepts $1 billion in tax revenues from Israel

The cash-strapped Palestinian Authority (PA) finally accepted over $1 billion in tax revenues, transferred by Israel on Tuesday. 

The PA Minister of Civil Affairs Hussein al-Sheikh announced on Twitter that Israel had “transferred [to the PA] all the due tax revenues amounting to 3.76 billion shekels ($1.14 b).”

Israel collects the tax revenues on all Palestinian imports and exports on behalf of the PA, and collected a 3% commission on the collected revenues, which account for more than 60% of the PA’s total annual budget. 

While Israel has refused to release the tax revenues to the PA in the past, the PA itself had been refusing to accept the money since May of this year, in protest of Israel’s annexation plans and US President Donald Trump’s “deal of the century.” 

Around the same time, the PA announced it would be suspending security coordination with Israel and all diplomatic relations with the US government. 

The refusal to accept the tax revenues compounded years of financial strife in the Palestinian territory, and forced the government to cut salaries to thousands of civil servants 

Following the election of US President-elect Joe Biden, however, the PA changed course, announcing that it was reinstating security coordination with Israel last month, under the pretext that they “received assurances” that Israel was “committed” to upholding its end of agreements with the Palestinians. 

It was widely speculated at the time of the announcement that the measure was taken with the priority of receiving the tax revenues as soon as possible, as well as to get in the good graces of the incoming Biden administration. 

As part of their efforts to improve its ties with the Biden administration, the PA is reportedly floating the idea of ending its payments of stipends to Palestinian prisoners and the families of Palestinians killed by Israel. 

The pensions have long been criticized by both Israel and the US who consider the policy to “promote terrorism”, and in July 2018, the Israeli Knesset passed a bill allowing the government to deduct the amount of the pensions from the monthly tax revenues. 

Leading up to Wednesday’s announcement that the PA was finally receiving the revenues, Israeli media reported that “several hundred million shekels” representing the amount to be paid to prisoners and families of slain Palestinians would be deducted” from the $1.14 billion prior to transfer. 

It appeared, however, that no such amount was deducted from the revenues, and the PA received the amount in full — a much needed respite for a government that is facing increasing public pressure over its handling of the coronavirus crisis and the latest rounds of lockdowns. 

For now, it seems, the arrival of the tax revenues means that PA will be able to hold off any wide scale public unrest for just a little bit longer.

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