Israel releases frozen PA tax funds for March and April

According to sources in Jerusalem, 1.851 billion NIS to be transferred this week; agreement reached through dialog between COGAT and PA officials.

April 18, 2015 11:46
3 minute read.

Palestinian Authority President Mahmoud Abbas gestures as he speaks in the West Bank city of Ramallah. (photo credit: REUTERS)


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Israel has agreed to release the NIS 1.85 billion in PA tax fees it withheld for the months of March and April but did not address whether sums would be frozen in future months.

Israel said it freed the funds out of humanitarian concern for the Palestinians and following talks between Coordinator of Government Activities for the Territories Maj.- Gen Yoav Mordechai and Palestinian officials.

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Frozen tax fees have been a source of tension between Israel and the Palestinian Authority, and the US, EU and UN had urged Israel to release the funds.

Israel first froze the money in January to protest the PA’s decision to join the International Criminal Court so it could sue Israel for war crimes.

The move forced the PA to cut most of its employees’ salaries by 40 percent and resort to an emergency budget.

Earlier this month, Israel agreed to release NIS 1.37b.

in Palestinian tax fees it had withheld for December, January and February, but an additional NIS 160,000 was not handed over to the PA and was used instead to offset Palestinian debt for Israeli services such as electricity, water and health.

That offset has not been returned. No such offsets were subtracted from the March and April Palestinian tax fees.

Future discussions also will be held between Israelis and Palestinians with regard to debt outstanding between the two sides.

The most publicized of those debts has been the NIS 2b. the PA owes the Israel Electric Company, which in February briefly shut off services to the Palestinian cities of Jenin and Nablus.

PA President Mahmoud Abbas said Saturday that the Israeli government would transfer the full sum of the frozen tax revenues to the Palestinians.

He said that, in the meantime, a joint Israeli-Palestinian committee would be formed to discuss the “financial obligations of both sides.”

Speaking at the beginning of a meeting of PLO Executive Committee members in Ramallah, he said the Israeli government previously had deducted one-third of the tax revenues.

“We rejected this and returned the money despite our difficult conditions,” Abbas said. “But now there is an agreement according to which Israel will send us all the money, while a joint committee discusses the financial obligations of both sides.

“They claim that we also have debts,” he added. “Therefore, we will bring this issues to the committee and we are prepared to accept whatever agreement is reached.”

Abbas said that following the Israeli decision to release the funds, the PA government would be able to pay full salaries to its workers at the end of the month.

“I welcome the announcement that agreement has been reached that will allow Israel to release tax revenues, collected on behalf of the Palestinian Authority,” said Nickolay Mladenov, UN Special Coordinator for the Middle East Peace Process. “Withholding these revenues for over four months has undermined the stability of the Palestinian institutions and the ability of Prime Minister [Rami] Hamdallah’s government to pay public sector salaries and provide needed services. This agreement is an important step in the right direction for both sides.”

Releasing the funds is the latest in a series of gestures Israel has made to the PA in recent months, including the authorization of a water hook-up for the new Palestinian city of Rawabi.

Israel also will double water sales to the Gaza Strip, from 5 million cubic meters to 10 million cu.m. by putting online new pipes and infrastructure that have been ready for operation for the last few years. The ban on the sale of Gaza produce to Israel also has been eased for the first time since it was imposed in 2007. Also, for the first time since the signing of the Oslo Accords 20 years ago, Israel has just allowed armed and uniformed Palestinian policemen to operate in a number of communities surrounding Jerusalem.

Reuters contributed to this report.

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