The political-security cabinet decided Thursday night to increase the amount that Israel will deduct from the Palestinian Authority’s tax funds in the coming year. The decision to increase the amount to NIS 21 million comes with the background of the payments that the authority transfers to the families of terrorists, according to three sources who participated in the cabinet meeting.
An Israeli senior official said that following the decision, Finance Minister Bezalel Smotrich will lift the freeze on all funds that Israel is supposed to transfer to the Palestinian Authority and that have not been offset or frozen – including the Palestinian tax funds collected during the month of January – and will also approve the transfer of some of the Palestinian tax funds that were offset to custody in Norway.
However, increasing the amount of the offset will further exacerbate the economic crisis in the Palestinian Authority, which is having great difficulty paying salaries and is in danger of bankruptcy and collapse. The security system warns that the economic crisis in the PA may lead to a security escalation in the West Bank as well.
Transferring funds to families of terrorists
During Thursday’s cabinet meeting, the Defense Ministry presented the data regarding the funds that the Palestinian Authority transferred to the families of terrorists during the year 2023. According to Israeli law, the government is obligated to deduct the relative part of this amount from the amount of tax money that it transfers to the Palestinian Authority every month.
Last week, when the issue was supposed to be discussed in the cabinet for the first time, Smotrich claimed that the Defense Ministry’s figures are lower than the amount that the Authority actually transfers to the families of terrorists. Smotrich announced that he would not transfer to the Palestinian Authority the tax money that Israel collected for it throughout January.
Smotrich not only threatened but delayed the transfer of funds for more than three weeks – something that further exacerbated the economic crisis in the Palestinian Authority.
Smotrich’s pressure worked. At the cabinet meeting yesterday, the Defense Ministry announced that following Smotrich’s claims, the amount of the offset was updated from NIS 610 million to NIS 631 million. The amount will be offset in the coming year every month in 12 installments of approximately NIS 52 million.
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