Israel to Release Withheld Palestinian Tax Revenues

TEL AVIV, March 28, 2015 (WAFA) – Israel has decided Friday to release hundreds of millions of dollars in Palestinian tax revenues it has withheld since last January following the Palestinian Authority’s accession to the International Criminal Court .

Israeli Prime Minister Benjamin Netanyahu’s Office announced: “Tax revenues that have been accumulated through February will be transferred, after payments for services to the Palestinian population have been deducted, including electricity, water and hospital bills.”

Israel said that the decision was based on “humanitarian concerns and an overall consideration of Israel’s interest at this time.”

The Israeli government decided to withhold around $375 million in tax revenues it collects on behalf of the Palestinian Authority on imports and exports over the last three months in reprisal for the PA’s accession to the International Criminal Court (ICC) to try Israel for war crimes.

PA formally applied to join the ICC on January 2nd following the United Nations Security Council’s failure to pass a Palestinian draft resolution setting a deadline for ending the Israeli occupation and establishment of the Palestinian state.

Meanwhile, Palestinian Government Spokesperson Ihab Bseiso reportedly said: “Until now we haven’t received any money, nor have we officially been informed of anything.”

In the meantime, the Palestinian Finance Ministry stated that the deductions made by Israel to cover services provided to the Palestinians haven’t been ‘agreed upon’ and constitute ‘an unjustified and illegal procedure that could cause complications’.

The ministry affirmed that transferring the tax revenues is not a favor done by the Israeli government and that the Palestinian government rejects any unilateral deductions outside the relevant calculation mechanism.

It viewed the deductions, which were not made in a transparent and fair manner, to constitute a continuation of the Israeli policy of reprisals against the Palestinian people and called on the international community to pressurize Israel into releasing the total sum of the withheld tax revenues.

Meanwhile, several countries and officials have reportedly swiftly made remarks welcoming Israel’s decision and viewing it as a constructive step toward re-invigorating peace talks.

US State Department Spokesperson Jeff Rathki said: “We welcome the decision of the prime minister of Israel to release withheld tax revenues to the Palestinian Authority. This is an important step that will benefit the Palestinian people and help stabilize the situation in the West Bank.”

Rathki expressed his country’s hope that “both sides will be able to build on this and work together to lower tensions and find a constructive path forward.”

EU High Representative and Vice President Federica Mogherini also welcomed Israel’s decision and said “The EU has been pressing for this step, without which the Palestinian institutions’ capacity to govern risked being fatally undermined.”

She added that this step “will ensure vital relief for thousands of Palestinian Authority’s workers and their families.”

Quartet Envoy Tony Blair also welcomed Israel’s decision and reportedly said: “It is absolutely the right decision both for the improvement of the conditions of Palestinians on the ground and for Israel.”

Blair expressed his hopes that “this will be the first of many steps, on both sides, that will mean we can work with renewed vigor to create the conditions for proper negotiations as we progress towards a two-state solution,” he said.

The Israeli government’s move to freeze the transfer of Palestinian tax revenues has been widely denounced as an illegal and retaliatory move that would only serve to escalate tensions and prevent the Palestinian institutions from effectively functioning.

Israel has frequently resorted to halting the transfer of Palestinian tax revenues and exploited it as a political instrument intended to punish the Palestinians for their political choices and attempts to secure the establishment of their state through international diplomatic means.

As a result of the Israeli measure, the PA has been incapacitated from fully paying approximately 170,000 public servants on its payroll, which costs between $160 and $170 million a month.

Under the Protocol on Economic Relations signed in 1994, Israel transfers $127 (175) to the PA each month in customs duties levied on goods destined for Palestinian markets that transit through international borders.

Acting to address the financial crisis it is gripped with, the PA has borrowed from local banks to partially pay 60% of the public servants’ January and February wages.