EU to Ask Palestinians to Accept Partial Tax Funds From Israel to Avoid Economic Collapse

Brussels was careful to note that this 'does not constitute a legal or political endorsement of Israeli deductions'

Palestinian President Mahmoud Abbas chairs a session of the weekly cabinet meeting with Palestinian Prime Minister Mohammad Shtayyeh, in Ramallah in the Israeli-occupied West Bank April 29, 2019.
Majdi Mohammed/Pool via REUTERS

The European Union will ask the Palestinian Authority on Tuesday to accept the transfer of deducted tax funds from Israel, until a solution to the Palestinian financial crisis can be found.

Israel has deducted from tax money it regularly transfers to the PA the sum given to families of prisoners convicted of security-related offences.

Despite an imminent financial collapse within the PA, Palestinian President Mahmoud Abbas has reiterated on several occasions that he will not accept partial tax fund transfers on principle, saying it would legitimize Israel's decision to withhold portions of the tax revenues.

The Ad Hoc Liaison Committee, the forum of countries and institutions that contribute financially to the Palestinians, met in Brussels on Tuesday.

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The EU representatives are expected to ask Israel and the Palestinian Authority to carry out the agreements made through the entity, including the transfer of tax monies according to the economic annexes of the Oslo Accords.

The EU representatives say that the PA must continue to accept funds from Israel on a "provisional basis," despite the deductions, to prevent its economic collapse.

Brussels was careful to note that this "does not constitute a legal or political endorsement of Israeli deductions."

PA representatives are participating in the forum's meeting, as will Israel Defense Forces representatives, who are expected once again to request that the international community fund several humanitarian projects in the West Bank and the Gaza Strip.

The stability of the PA is integral to stability in Israel and in the West Bank, European officials said, expressing hope that the parties will avoid actions that could further threaten regional stability. 

The EU did express reservations about the Palestinian system of payments to security prisoners and their families, upon which the Israeli rationale for withholding funds is based. The EU recently expressed concern about the matter to senior PA officials.

Israel collects taxes on behalf of the PA and transfers the money monthly. In February, Israel dramatically cut funds under a law passed last year that allows Israel to deduct the the amount of money that the PA pays to Palestinian prisoners and their families.

Abbas is refusing to accept the reduced sum on principle. The tax transfers constitute 63 percent of the PA’s budget.