Is the PA facing a financial crisis? At least one Israeli NGO says no

The PA is refusing to take any money if it does not receive all of the money.

May 22, 2019 17:47
2 minute read.
Is the PA facing a financial crisis? At least one Israeli NGO says no

Palestinian Authority President Mahmoud Abbas speaks at a meeting in Ramallah on March 19, 2018. (photo credit: PPO)


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The Palestinian Authority should not be facing a financial crisis in 2019, according to Palestinian Media Watch.

The Israel-based non-governmental organization and media watchdog group obtained figures from the Finance Ministry under the Freedom of Information Law that it believes “prove that even after Israel deducted from tax transfers the amount the PA spends on salaries to terrorist prisoners, the PA would have still received more money in the first two months of 2019 than it received on average per month in 2018.”
In February 2019, Israel implemented the “Pay-for-Slay” Law that instructs the state to deduct and freeze the amount of money the PA pays in salaries to imprisoned terrorists and families of “martyrs” from the tax money it collects for the PA. The law was passed in July 2018 and approved for implementation by Israel’s security cabinet this year.

PMW said that revenues in the first two months of 2019 increased by a total of NIS 109 million, while the amount of the deduction was only NIS 42 million – a positive difference in favor of the PA of NIS 67 million.

The PA’s total revenue from taxes collected by Israel in January through February 2019 was NIS 109 million higher than in the corresponding period last year, amounting to NIS 1.471 billion, compared to NIS 1.362 billion.

The PA is refusing to take any money if it does not receive all of the money.

Itamar Marcus, director of PMW, explained that the Palestinian Authority collects taxes from three sources: imports, gas and income tax collected by Israel on behalf of Palestinian workers employed in the Jewish state. In recent years, he said, there has been a steady increase in the number of Palestinians with jobs in Israel.

“Israel agrees to give 75% of income taxes collected to the Palestinian Authority,” said Marcus. “The gesture is to encourage the Palestinian economy.”

“Abbas' decision to refuse the tax revenues from Israel is based on the PA's basic principle that the terrorists - all of them, without distinction between stone throwers and murderers, between members of Fatah or Hamas - did not carry out acts of terror but only did what the PA ‘ordered them to do,’” added Nan Jacques Zilberdik, a senior analyst with PMW.

Efraim Inbar, president of the Jerusalem Institute for Strategy and Security and a fellow at the Middle East Forum, found facts similar to PMW’s. In a column published on May 2, Inbar said the PA's refusal to take tax revenue has added to what was already a chronic budget crisis, largely due to decreased international financial support for the PA in recent years. But he said that the PA is using threats of a pending economic crisis to “scare Israel and the world community into believing the relative stability in the West Bank will come to an end, leading to chaos and terror.

“The PA leadership is emulating Hamas's behavior by threatening that a humanitarian disaster will ensue unless more financial aid is rendered,” Inbar wrote. “While it is best for all concerned to ensure a decent standard of living for Palestinians in the West Bank and Gaza, it is highly unlikely that the PA will economically collapse.”

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