Report: Despite Promises, Israel Gave PA Additional NIS 500M

Israel has transferred hundreds of millions of shekels to Ramallah that the Palestinian Authority uses to pay terrorist stipends in violation of Israeli law and in contrast to statements from Defense Minister Benny Gantz. This is according to Israeli nongovernmental organization Palestinian Media Watch’s analysis of an official PA report submitted to Western states.

Israel, which collects taxes on behalf of the PA as part of a mechanism outlined in the 1993 Oslo Accords and transfers the funds to Ramallah monthly, began deducting the sums the PA uses to pay terrorists in July 2018, after the Knesset passed a law to that effect, in an effort to discourage the Palestinian practice. Israel has frozen NIS 1.3 billion ($417.26 million) in tax funds since the law went into effect.

In September, Israel transferred NIS 500 million ($160 million) to Ramallah, in addition to the tax funds it collects for the PA every month. The move followed a meeting between Gantz and PA President Mahmoud Abbas in late August.

Soon after the meeting, the Coordinator of Government Activities in the Territories (COGAT), the Israeli governing body that operates in Yehudah and Shomron, clarified the NIS 500 million had in fact been a loan. It said the funds were in fact an advance on future tax payments, and as a result, the 500 million shekels would not be coming out of taxpayer funds.

According to an English-language budget performance report for the month of September, compiled as part of Ramallah’s commitment to transparency to donors and the international community, Israel transferred a total of NIS 1.7 billion ($545 million) to the PA in September alone.

In the report’s appendices, the PA made note of the NIS 500 million it received from Israel but said 100 million of those 500 million had been an advance on future payments, while the PA had been owed the 400 million in payments from “previous months.”

According to Ramallah, then, Israel had not in fact provided an advance on future tax funds as claimed but rather transferred money it owed the PA. In other words, Ramallah made clear in the official report it had no intention of repaying 80% of the funds it received from Yerushalayim.

The analysis is even more troubling when taking into account that, following Gantz’s meeting with PA Chairman Mahmoud Abbas in August, the PA claimed the defense minister had agreed to return “some of our funds held by Israel.”

If the PA’s budget report is correct, the Israeli government has in effect transferred one-third of tax funds it was legally required to withhold despite Abbas’ continued payments to terrorists.

In a statement, Gantz said: “As previously stated, the loan was provided from future repayment funds the Palestinian Authority was supposed to have received from the Israeli tax collection.”

Itamar Marcus, the founder and director of Palestinian Media Watch, said, “The dispute between Israel and the Palestinian Authority as to the nature of the 400 million shekels is unreasonable.

“Could it be that Israel transferred nearly half a billion shekels to the PA without a written agreement indicating it was a loan?” Marcus asked.

“Israel must demand the PA correct the budgetary report to reflect that this is a loan,” he said.

The Palestinian Authority routinely spends hundreds of millions of dollars on payments to terrorists imprisoned in Israel and to the families of terrorists killed while carrying out attacks against Israel. The PA’s “pay-for-slay” policy is a widely condemned practice that takes a growing cut of Ramallah’s budget – funded by donor countries in the West and the Arab world – every year.

“Pay-for-slay” has earned the PA scathing international criticism, but Abbas has vowed to keep up terrorists’ payments, even it if bankrupts the PA.