Kerry Warns of PA Collapse if Israel’s Tax Freeze Persists

LONDON, February 22, 2015 (WAFA) – The United States’ Secretary of State John Kerry warned on Saturday about a potential collapse of the Palestinian Authority, as Israel continues to withhold the tax revenues it collects on behalf of the PA for the second month.

During a meeting with British Foreign Secretary Philip Hammon in London, Kerry said he was concerned about the viability of the PA if it does not soon receive tax revenues which have been withheld by



Kerry also warned that the repercussions of Israel’s withholding of the Palestinian tax revenues could spell over the region.

While the US opposed PA’s move of joining the International Criminal Court last December, it has raised concerns with Israel about its decision to freeze the transfer of more than $100 million (65 million pounds) in tax revenues collected on behalf of the PA.

“If the Palestinian Authority ceases, or were to cease security cooperation, or even decide to disband as a result of their economic predicament, and that could happen in the future if they don’t receive additional revenues, then we would be faced by yet another crisis,” Kerry told a news conference.

“We are working hard to prevent that from happening and that is why we have been reaching out to key stakeholders to express these concerns and also to try to work together to find a solution to this challenge,” he added.

Since January 4, Israel withheld around a billion shekels (about $260 million) in tax revenues collected on behalf of the PA, in response to its accession to ICC.

The move has hindered PA’s ability to pay for civil servant wages and pensions, and was only able to secure 60% of the total payroll for December 2014 and January 2015 through a bank loan.