Palestinian women walk past a money changer in the West Bank city of Ramallah February 16, 2010. REUTERS/Mohamad Torokman/File Photo.
(photo credit: REUTERS/MOHAMAD TOROKMAN)
The Palestinian Authority has demanded that the Israel government transfers $360 million in back taxes it has collected for commercial activity in Area C of the West Bank.
Israel stopped transferring those funds in the year 2000, which would have amounted to an estimated $20 million a year, the PA said.
It made its demand in a report it issued for Thursday’s meeting of the Ad Hoc Liaison Committee on the sidelines of the United Nations General Assembly in New York.
The meeting, which is held twice a year, deals with donor funding for the Palestinians. This year it is expected to grapple with declining donor funds, particularly the US decision to halt over half-a-billion in payments to the Palestinian Authority
either directly or through the United Nations.
The sum that the Palestinians are demanding in back taxes, would go a long way to making up for that shortfall.
The World Bank, in its report to the Ad Hoc, also spoke of the problems incurred by Israelis decision to withhold funding.
The $360 million referenced in the PA’s report, including tax money that Israel should have transferred from 2,000 Israeli companies or individuals doing business in Area C of the West Bank.
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In the year 2000 “Israel ceased all tax transfers and stopped informing Palestine about Israeli commercial activities in Area C,” the report stated.
“As a result, Israeli companies are profiting form commercial activities in Area C without paying taxes to Palestine,” the report stated.
Israel collects taxes on behalf of the Palestinian Authority and transfers it to the PA under the terms of the 1995 economic arrangement between the two governments known as the Paris Protocol.
The 17 years of back taxes is only one of the issues related to the implementation of the protocol, the report stated. It added that the PA estimates an annual loss of $350 million due to Israeli violation of that agreement.
“Israel continues to control over 70 percent of our revenues and intermittently uses it to blackmail the Palestinian Government,” the PA said in the report.
Among those expected to attend the Ad Hoc meeting is US special envoy Jason Greenblatt, Palestinian Authority President Rami Hamdallah and Israeli Minister of Regional Cooperation Tzahi HaNegbi.
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