Palestinian Authority Returns Slashed Tax Revenues to Israel

The money had been deposited in a Palestinian bank before it was returned in protest over the reduced amounts Israel deposited

Palestinian President Mahmoud Abbas during a leadership meeting in Ramallah, West Bank, February 20, 2019.

In protest, the Palestinian Authority has returned tax revenues Israel collects on the PA’s behalf, after Israel deducted the amount that the PA pays to Palestinian prisoners in Israel.

The money had been deposited in a Palestinian bank before it was returned. The Palestinian government’s spokesman, Ibrahim Melhem, and two other sources confirmed that the money had been returned in protest over the reduced amounts Israel deposited.

As reported in Haaretz earlier this week, Israel transferred the money without coordinating the move with the Palestinians, the second time it has done so, the first time being in February, when the Palestinians also returned the money.

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Haaretz reported this week that the European Union and the Ad Hoc Liaison Committee, the forum of donor states helping the Palestinians, met in Brussels this week. They offered to mediate between Israel and the Palestinian Authority and to formulate a new model for providing financial support for Palestinian prisoners in Israel.

According to this model, payments will be based on the socioeconomic condition of the prisoner’s family, regardless of the reason the prisoner is incarcerated. The international community would like to use this model to resolve the crisis created by the cuts in funds transferred by Israel, which objects to payments the PA makes to people convicted of terrorism and their families.

Sources who attended the Brussels meeting told Haaretz that the model is intended to resemble Israel’s National Insurance Institute. Until it’s set up, European Union representatives asked the PA to accept the reduced funds from Israel on a temporary basis, without recognizing the legitimacy of Israel’s actions, so as to avert a humanitarian crisis and an economic collapse, which could happen within months if the PA continues to refuse to accept the reduced funds.

However, PA President Mahmoud Abbas likely will not compromise and instead demand the entire amount collected by Israel. A senior PA official told Haaretz that the Palestinian leadership is leaning towards rejecting the offer. The head of the prisoners’ administration at the authority said, “These prisoners are freedom fighters, similar to our security forces, so no Palestinian leader could agree to this offer.”

He added that this had been related to the European Union and to the forum of donor states. “Attempts to portray prisoners as beggars will not work. Everyone should understand this. This is a matter of principle,” said the official. Another official noted that attempts to hurt prisoners by depriving them of rights is part of a series of steps taken by Israel and the U.S. to curtail their national identity. This includes recognizing Jerusalem as Israel’s capital and the slashing of funds from the UN refugee agency, UNRWA. “Now they want to make the prisoner issue a social one, rather than a national one. No one will agree to such a compromise,” said the senior official.

Taxes collected by Israel comprise 63 percent of the PA’s budget.