Prime Minister Benjamin Netanyahu’s bureau held a briefing for foreign media agencies on Thursday, announcing his decision to freeze the transfer of tax money that Israel collects for the Palestinian Authority, with funds also being confiscated to pay off PA debts to the Israel Electric Corporation and other entities. This was Israel’s response to the PA’s application to join 15 international conventions and treaties at the United Nations, the bureau said.
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But there was a large disparity between the briefing and reality. Senior Israeli officials said that Israel had transferred to the PA the entire amount of the tax revenues it had collected in March – approximately $100 million – three or four days earlier.
When Netanyahu's bureau announced the sanctions and the freeze on funds to the international media and Habayit Hayehudi Chairman Naftali Bennett, the money was already safely ensconced in the bank account of the Palestinian Finance Ministry. In Yiddish it's called "Yisrabluff." In English it's called "spin."
The senior officials said Netanyahu’s decision to freeze the money, over the objection of Finance Minister Yair Lapid, would only be relevant, if at all, in May, with regard to tax money collected in April. The officials say the decision, which had declarative value only, was intended for domestic political consumption, particularly to calm the right flank of Netanyahu’s coalition.
In any case, peace talks between the Israelis, Americans and the Palestinians will continue until April 29 – the date set for the conclusion of negotiations – in an attempt to extend them. If the efforts are successful, the transfer of the Palestinian tax money in early May will take place as planned. And if the efforts fail and the two sides embark on a collision course - Israel could be expected to impose far more severe sanctions than holding back the tax money, anyway.
When the international media reported on the “freezing of the tax funds,” the U.S. government and the PA knew full well that the money had already been transferred a few days previously. That is the reason responses to the announcement were limp. The Palestinians barely condemned it, while U.S. State Department Spokeswoman Jan Psaki said that the media reports were unofficial and that they could not ascertain if what was reported was correct, adding, “We would regard such a development as unfortunate.”
The use of the term "freezing of the tax funds" is only a euphemism for robbery. The money is Palestinian, not Israeli. The collection of taxes for the Palestinians is part of the Oslo Accords, whereby the money is to be transferred directly to the Palestinian Finance Ministry. Israel has stopped the transfer dozens of times before, yet the sanction never led to an improvement of the situation and the Palestinians never reversed whatever had irked the Israelis. Rather, the freeze led to condemnations from the United States and the European Union as well as heavy international pressure, causing Israel to give in time after time.
Senior officials in Jerusalem said the freezing of the Palestinian taxes actually goes against Israeli interests, because the taxes are used to pay tens of thousands of PA employees, including security personnel.
"Israel is behaving like someone who cuts off his nose to spite his face," said one official. Without salaries the Palestinian policeman are liable to stay home. The result would be anarchy in the territories that would quickly be translated into violence against Israel.