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PA struggling to cover expenses after Israel freezes tax transfers, citing ‘Pay to Slay’

The FM said the funds were held up because of the PA’s ‘fighting against the State of Israel.’

By World Israel News Staff

The Palestinian Authority is struggling to cover its expenses after Israel froze tax transfers over the PA’s funding for stipends to jailed terrorists, Ramallah claims.

After Finance Minister Bezalel Smotrich decided to withhold tax funds from the PA, the PA announced that it could only pay 50% of public sector salaries.

Smotrich has withheld the transfer of NIS 170 million shekels ($46 million) in taxes collected by Israel from PA workers employed in Israel on behalf of the Palestinian Authority, citing the PA’s “fighting against the State of Israel,” a reference to the PA’s support for the International Criminal Court issuing arrest warrants against Israeli Prime Minister Benjamin Netanyahu and other members of Israel’s government on alleged war crimes.

The PA says it can only afford to pay 50% of its public sector employees after the Finance Ministry withheld tax funds last month.

Smotrich also withheld tax revenues from the PA earlier in the war because of the concerns that they would find their way to Hamas.

An agreement was reached in February to transfer the funds through Norway to ensure they would not be used to aid Hamas.

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Smotrich also cited the PA’s funding for terrorism, particularly the PA’s “Pay for Slay” policy that gives funds to jailed terrorists and the families of slain terrorists.

He announced in February, “For the first time, I signed a double offset of terror money that the PA transfers to terrorists’ families,” he said. “We have deducted 100 million shekels instead of 50 million up until now.”

“Furthermore,” Smotrich added, “we deducted an additional NIS 200,000 that will be transferred as compensation to the families of terror victims, in accordance with the court’s ruling. The PA funds terrorists, but now the State of Israel is saying: enough is enough. The citizens of Israel will not be part of this farce.”

According to 2018’s so-called “Pay for Slay” law, the government is supposed to withhold an amount of tax money it collects for the PA from Palestinian workers in Israel that is equal to the financial support the Authority provides to jailed terrorists and the families of those killed in attempted or actual attacks.

The PA pays hundreds of millions of shekels each year on a sliding scale, with those committing the most heinous crimes receiving the highest salaries. The PA consistently vows that it will never stop the payments no matter what Israel does, even though the tax revenue is a vast part of its budget.