NEW YORK - Finance Minister Yuval Steinitz on Tuesday threatened severe financial ramifications if Palestinian Authority President Mahmoud Abbas makes good on a plan to request UN membership for a Palestinian state this week.
Steinitz, a close ally of Prime Minister Binyamin Netanyahu, said his government could stop collecting the 40 percent of the Palestinian Authority's budget through value added, excise and customs taxes.
"It is my view, there is no (Israeli) government decision, that if the Palestinians violated the very fundamentals of the peace agreement, we should reconsider delivering tax money to them," Steinitz said in an interview with Reuters.
Taxes that Israel collects on behalf of the Palestinian Authority total about 500 million Israeli shekels ($135 million) a month, Steinitz said.
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