The far-right Israeli Minister of Finance, Bezalel Smotrich, ordered the deduction of 35 million US dollars from the Palestinian Authority’s tax funds (clearance), and transferring them to Israeli families who claim that members of them were killed in attacks carried out by Palestinians.
The newspaper “Israel Today” reported that Smotrich instructed the deduction of 130 million shekels (35 million US dollars) from Palestinian tax funds (clearance), and transferring it to 28 Israeli families who claim that members of them were killed in attacks carried out by Palestinians.
Smotrich said, “The Palestinian Authority encourages terrorism and pays money to the families of terrorists, prisoners, and freed Palestinian prisoners,” stressing that Israel It has deducted the same amounts paid by the Palestinian Authority from its funds, and will transfer them to the families of “victims of terrorism.”
The newspaper added that through this decision, Smotrich allows for the retroactive application of dozens of legal provisions that have remained inactive for many years, some of them for 20 years.
She indicated that some amounts amount to millions and will be transferred to each family in the coming days.
The newspaper considered that Smotrich’s decision was motivated by the Palestinian Authority’s refusal to pay compensation to the families (whose members were allegedly killed) even though the courts in Israel ordered it to do so.
It quoted the Israeli Ministry of Finance as saying that Smotrich’s decision opens a “green path” to confiscate the Palestinian Authority’s funds, which may lead to a wave of new lawsuits against it.
This decision is the latest in a series of decisions taken by Smotrich in the past months, which plunged the Palestinian Authority into a stifling financial crisis.
The Palestinian Authority did not immediately comment on the decision, but it usually describes Israeli measures as “piracy.”
Warnings of collapse
On May 23, the World Bank warned that the public financial situation of the Palestinian Authority had deteriorated sharply in the past three months, which greatly increases the risk of a collapse in public finances.
Clearance funds are the taxes paid by Palestinians on goods imported from Israel or through Israeli border crossings, with a monthly average of $220 million.
The Palestinian government mainly uses clearing funds to pay the salaries of public employees, and they constitute 65% of the total financial revenues of the Palestinian Authority.
However, as of 2019, Israel decided to deduct an amount of 600 million shekels ($165 million) annually from the clearance funds, in exchange for the monthly allocations provided by the Palestinian Authority to prisoners and liberated prisoners.
The annual figure for this deduction related to allocations for prisoners and released prisoners increased to an average of 700 million shekels annually ($195 million).
Since November 2021, the Palestinian Authority has not been able to pay the salaries of public sector employees in full proportions, but rather in proportions ranging between 50-90% of monthly salaries.
The Israeli General Security Agency (Shin Bet) also previously warned of the collapse of the Palestinian Authority if the financial crisis continues.
But Smotrich repeatedly stressed his determination to withhold and deduct Palestinian funds, as one of the repercussions of the ongoing war against the Gaza Strip.
