Israel May Deduct PA Fines, Debts From Tax Proceeds

Israel is considering deducting money it transfers to the Palestinian Authority from duties collected on behalf of the PA to pay off private debts owed by PA residents to Israelis. According to estimates, PA residents owe some NIS 500 million to Israelis in debts, court judgments, and other payments that are unlikely to be paid off.

According to Yisrael Hayom, there are 20,716 open and uncollected debts against PA residents for the payment of judgements, insurance claims, fines, and fees that are currently deemed uncollectable. Another 30,000 or so cases are still being processed. The majority of the judgements and open cases are by Israelis who did business or performed services for PA residents but have not been paid.

Justice Minister Ayelet Shaked is considering ways to force the PA to pay for its residents’ refusal to take care of their debts, and deducting payments to the PA for the debts is one idea. The plan would cover debts of up to NIS 75,000 owed to private individuals who can furnish proof of debt, like a receipt or a bounced check. In the past, the method has worked to force the PA to pay up or settle with Israeli companies, like the Israel Electric Corporation.

In theory, Israelis who are owed money can file a claim with PA courts, which will usually issue a judgement to the Israeli claimant. However, there is no effective collection mechanism in the PA, and the collection can usually only be carried out against PA residents who have assets in Israel, Shaked’s office said.