PA Tax Money, Smotrich, and Settlements
Blog Post by Lev Cohen
In the 90s, the region was closer to peace than ever, and the Israeli government, led by Yitzhak Rabin, entered negotiations with the Palestine Liberation Organization, headed by Yasser Arafat. These talks resulted in the Oslo Accords, to which Israel made several commitments.
One section of the accords was the Paris Protocol, which allowed the newly created PA to collect taxes as a precursor to building itself as a state. However, Israel collects import and VAT taxes on behalf of the PA, which accounts for about 60% of the PA’s funding.
After the events of October 7th, citing the PA’s “family payouts for terror acts” policy, Israel withheld substantial amounts of tax money. For instance, in May alone, over $46 million was withheld, and as the PA struggled to pay its employees and maintain order in the West Bank, Israel’s Finance Ministry, led by extremist Betzalel Smotrich, blocked payroll to the PA’s civil servants for months. This jeopardized the PA’s control over the West Bank and, combined with restrictions on Palestinian workers entering Israel, caused severe economic hardship in the region.
In light of the economic stranglehold on the West Bank, concerns quickly arose about the potential collapse of the Palestinian Authority. In response, the Israeli government reversed its initial policy of withholding funds, only for Smotrich to announce the legalization of 5 West Bank outposts in retaliation. This is just one of many examples of Israel’s far-right government continuing to entrench the occupation of the West Bank, impacting daily life and stability in the area; and while the PA’s family payouts for terror acts policy must end, Israel’s continued settlement expansion only threatens its own security.
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Sources:
(1) For background on the Oslo Accords and the Paris Protocol:
B’tselem. “The Paris Protocol.” B’Tselem, 1 Jan. 2011,
www.btselem.org/freedom_of_movement/paris_protocol.
Watson, Geoffrey R. Passages, Ports, and Economic Issues. 24 Aug. 2000, pp. 143–167, https://doi.org/10.1093/acprof:oso/9780198298 915.003.0008. Accessed 28 Jan. 2024.
(2) For information on Israel’s recent withholdings:
TOI Staff. Pa Says It Can Only Pay 50% of Civil Sector Salaries This Month as Tax Funds Withheld | The Times of Israel,
www.timesofisrael.com/pa-says-it-can-only-pay-50-of-civil-sector-salaries-this-month-as-tax-funds-withheld/. Accessed 26 June 2024.
(3) Jacob Magid. Norway, PA Still Weighing Israel-Approved Plan for Transferring Palestinian Tax Revenues | The Times of Israel,
www.timesofisrael.com/liveblog_entry/norway-pa-still-weighing-israel-approved-plan-for-transfe rring-palestinian-tax-revenues/. Accessed 26 June 2024.
(4) Boxerman, Aaron, and Adam Rasgon. “Israeli Minister Will Release Palestinian Funds If Settlements Are Legalized, Officials Say.” The New York Times, 28 June 2024, www.nytimes.com/2024/06/29/world/middleeast/israel-funds-palestinian-authority-smotrich.html . Accessed 3 July 2024.
(5) Lis, Jonathan. “Smotrich to Cancel Decision to Freeze Palestinian Authority Tax Funds over Fears of Its Collapse.” Haaretz.com, Haaretz, 28 June 2024,
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