Compromise Reached On Palestinian Tax Transfer

YERUSHALAYIM/RAMALLAH (Reuters) -

Israel and the Palestinian Authority reached a compromise agreement over the weekend on the transfer of $470 million of withheld tax revenues following talks between a senior Israeli military officer and Palestinian officials.

Following international pressure, Israel agreed last month to resume the transfers and said it would pay $400 million, having deducted money the Palestinians owed for utilities and medical treatment.

However, PA President Abbas said he would not accept this sum since Israel had made its deductions unilaterally. The current agreement appears to have resolved this issue.

“An agreement was reached to send three months’ worth of funds in full and a joint [Palestinian-Israeli] committee will discuss all the amounts that belong to us and what we owe,” Abbas said.

In December, Israel began withholding around $130 million per month of taxes it collects on behalf of the Palestinians after the Palestinian Authority announced it was joining the International Criminal Court (ICC).

Israel had condemned the Palestinian move to join the ICC, saying it was a unilateral step that undermined prospects for a negotiated peace settlement.

The move forced the PA to cut most of its employees’ salaries by 40 percent and to resort to an emergency budget.

An Israeli government official, who declined to be named, said in a statement that 1.85 billion shekels ($473 million) would be transferred after negotiations resulted in a deal.

The transfer was meant to ensure regional stability and for humanitarian considerations, the official said, but gave no further details. According to the statement, Israel’s state-owned electric corporation says it is owed about $510,000 by the Palestinians.

Abbas informed a meeting of the Palestine Liberation Organization of the coming transfers, and said a joint Israeli-Palestinian committee would discuss outstanding sums.