Report: Israel to Excuse PA from NIS 250 Million in Taxes

What the Palestinian Authority refuses to take with one hand, Israel appears determined to give it with another: A report in Yisrael Hayom Thursday said that Israel plans to excuse the PA from NIS 200 million per month, or nearly a quarter billion shekels annually of excise taxes which are usually paid on the fuel Israel sells or gives to the Authority. The new gesture, the report said, comes over concern that the PA could collapse financially.

The reason the Authority is failing is because it has refused to halt its payments to terrorists and their families. Knesset legislation requires the government to withhold from the PA the amount of money that is used for this purpose from customs funds that Israel collects on behalf of the PA. That amounts to about NIS 500 million a year, and the Authority has claimed that it is near financial collapse because of this.

In response, the PA has refused to accept any of the customs money that Israel is willing to transfer, demanding that it all be provided. At a meeting with a delegation from the far left J Street group after the first cut in Februrary, PA Chief Mahmoud Abbas said that “even if we had just a small amount of money, NIS 20 or 30 million, our priority would be paying” the terrorists and their families. “We don’t need Israel’s money,” he said.

With the new plan, Israel will be more than making up for the cuts, and thus the PA will remain financially stable, the report said.

Sharply criticizing the gesture was former Director General of the Israel Ministry of Strategic Affairs Yossi Kuperwasser. “The PA has objected to all economic normalization with Israel, we don’t have to give them a shekel,” the report quoted him as saying. “I do not believe these stories of the PA’s imminent financial collapse. The establishment of the PA is the greatest thing to ever happen to the Palestinian movement. They will not let it fall apart so easily. There is always the European Union, the Gulf states or banks that will bail them out. Even if the PA does collapse, that wouldn’t be ideal, but it wouldn’t be such a tragedy for us.”