Israel releases frozen PA tax funds

After much deliberation, Israel and the PA have agreed on a formula for the transfer of funds collected by Israel on behalf of the PA. 

By: Atara Beck, World Israel News

After withholding Palestinian Authority (PA) tax revenue collected by Israel on its behalf, Israel will turn over NIS 1.85 billion in PA tax fees collected for March and April.

The Coordinator of Government Activities for the Territories (COGAT), the IDF unit responsible for implementing government policy in Judea and Samaria and vis-à-vis the Gaza Strip, and Palestinian officials agreed upon the transfer of the funds after they settled on a sum for overdue payment for services rendered to the Palestinians by Israel such as electricity, water and hospitalization, which will be deducted from the tax funds of January and February, but not March and April.

They also agreed to form a joint Palestinian-Israeli committee tasked with reviewing all debts which need to be settled by the PA.

Israel said it was turning over the tax funds out of humanitarian concern for the Palestinians.

Nickolay Mladenov, the United Nations special coordinator for the Middle East peace process, welcomed the release of the tax revenues. “Withholding these revenues for over four months has undermined the stability of the Palestinian institutions,” he said. “This agreement is an important step in the right direction for both sides.”

Israel did not say whether sums would be frozen in future months.

Unsettled Debts

In March, Prime Minister Benjamin Netanyahu decided to release the funds collected until that point, citing regional stability as the reason.

PA head Mahmoud Abbas initially rejected Israel’s offer of a partial transfer of tax revenues that it collects for the Palestinians and refused Israel’s requirement to settle debts incurred, including unpaid utility bills.

The initial decision in January to withhold the funds was made in response to the  PA’s bid to join the International Criminal Court (ICC) in order to charge the Jewish State with “war crimes.”

Israel, which collects taxes for the PA as part of the Oslo Peace Accords, had frozen PA assets twice before in retaliation for anti-Israel actions. The funds account for 70 percent of the PA’s revenue.

The US expressed concern that the PA might collapse. “It’s true we’re very concerned about the continued viability of the Palestinian Authority if they do not receive funds soon,” State Department spokeswoman Jen Psaki told reporters in February. Israel came under pressure by the US and UN to release the funds.