Israel to Withhold Tax Revenues for Third Successive Month

TEL AVIV, February 24, 2015 (WAFA) – The Israeli government decided to withhold $175 million in Palestinian tax revenues it collects on behalf of the Palestinian Authority (PA) for the third successive month, reported Anadolu News Agency.

Israel’s Channel 10 reported on the Coordinator of the Israeli Government Activities in the occupied Palestinian Territory announcing that Israel plans to withhold the tax revenues it has levied on behalf of the PA for February.

During January, Israel suspended the transfer of $127 (175) million in tax revenues it collected on behalf of the PA for December in reprisal for the PA’s accession to the International Criminal Court (ICC).

PA formally applied to join the ICC on January 2 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.

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.

PA has urged Arab foreign ministers to provide it with a $100 million in monthly safety net, but they have failed to do so.

The US Administration has warned recently that the PA would not be able to function should Israel continue to withhold the tax revenues.

President Mahmoud Abbas has recently warned that the PA would take harsh steps shouldn’t Israel release tax revenues.

“Should Israel continue to withhold our money, we will be obliged to take harsh steps,” stated Abbas during a joint press conference with Luxembourg’s Foreign Minister Jean Asselborn at the Foreign Ministry in Luxembourg.