Tuesday, October 15, 2019

Palestinian Authority reaches agreement with Israel over fuel taxes


By Patty Diphusa - August 29, 2019
TAGS:
Section: [Main News]
Tags: [financial crisis]

The Palestinian Authority (PA) has announced on 22 August they have reached an agreement with Israel to directly collect fuel taxes.


Before the agreement, Israel was responsible for collecting about $60m in monthly fuel taxes on behalf of the PA. As for now, the PA will collect these without the need of Israeli transfer of the funds.


As Al Jazeera reported, Palestinian Prime Minister Mohammad Shtayyeh stated that “the additional revenue will ease a financial crisis and let him increase civil servants' partial salary payments”. 


The decision is an improvement for the PA’s financial situation following hard months after Israel started to deduct millions of dollars of Palestinian tax revenues it collects on behalf of the PA in February 2019.


According to Al Jazeera, Israel claimed the money was being used “to encourage violence”, while Palestine insisted it was aimed at “assisting distressed families” whose members had been murdered or imprisoned by Israeli forces.


Although the deducted funds amounted to five per cent of the total sum collected by Israel on behalf of the PA, Palestinians refused to accept any tax revenues from Israel as a way to protest the Israeli decision.


As Palestinian News Agency WAFA reported, the situation amounted to the PA not being able to fulfil its financial obligations, particularly the payment of salaries to public servants who have been receiving 50 per cent of paychecks since February. 


With this agreement, the PA will pay 60 per cent of the salaries plus the remaining 50 per cent of the sums that had not been paid.


However, as Palestinian Prime Minister Mohammad Shtayyeh explained, "this doesn't mean that the PA's financial crisis is over because Israel is still holding on to billions of shekels.”


According to Haaretz, Palestinians will continue to refuse to receive these funds “as long as Israel poses hurdles to the PA's payment of stipends to the families of prisoners and released prisoners”.


Minister Shtayyeh concluded that this is part of a larger strategy of "gradual disengagement from the colonial relationship with the occupation”.

 

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