Israel will not transfer much-needed funds to the Palestinian Authority in the wake of the decision by three European countries to recognize a Palestinian state, the country’s finance minister said on Wednesday, as its foreign minister denounced the European moves as giving “a gold medal to Hamas terrorists.”
The decision by the finance minister, Bezalel Smotrich, a far-right leader who opposes Palestinian sovereignty, threatened to push the Palestinian government into a deeper fiscal crisis. He said in a statement that he had informed Prime Minister Benjamin Netanyahu that he would no longer send tax revenues to the authority, which administers parts of the Israeli-occupied West Bank in close cooperation with Israel.
Mr. Smotrich’s office signaled that the decision was at least partly a response to Spain, Norway and Ireland recognizing Palestinian statehood, and that the Palestinian leadership bore responsibility for campaigning for the move.
Edit: I tracked down a copy of the actual relevant agreement, and it definitely is money collected from Palestinians and on purchases made in Palestine on products that are brought into Palestine. Discussion a few comments down if interested.
I’m not sure if they collect all taxes, but according to the article they do collect at least some (and a meaningful amount):
"Under decades-old agreements, Israel collects customs and import taxes on behalf of the Palestinian Authority. Those revenues constitute most of the Palestinian budget, particularly as international aid has declined. "
Those customs and import taxes referenced in the article are on goods that get imported into Israel, and they get paid by people in Israel. Until now, a portion of that revenue was gifted to the governments in Gaza and the West Bank.
As best as -I- can tell, Israel is collecting Palestinian taxes. Here’s another article from a different outlet:
What are the Palestinian funds that Israel collects?
Israel collects Palestinian import tax revenue as agreed to in the 1994 Paris Accords signed by the Palestine Liberation Organisation and Israel. The tax revenue Israel collects is made up of indirect taxes imposed on Palestinian imports. It comes from two primary sources: VAT on goods and import tax on goods brought in from outside Israel.
These are taxes that would normally be collected by a country for transactions within/at their borders, not charity/extra taxes paid for by Israelis. From the Wikipedia article, Israel collects taxes on goods/services that end up in Palestine, and controls/collects tariffs on goods entering Palestine. They tax Palestinian labor both in Israel and in the illegal settlements in OPT. They have also used withholding those taxes as a form of control several times in history and those are listed in the article.
As you note, this situation was only supposed to last 5 years, instead Israel has enforced it for 30 and according to the UN it’s not because Israelis are “giving them free money”. "However, 30 years later, the financial settlement continues to give the Israeli state what the United Nations Conference on Trade and Development (UNCTAD) has called “a disproportionate influence on the collection of Palestinian fiscal revenue, leading to deficiencies in the structure and collection of customs duties resulting from direct and indirect importing into Palestine”.
I am not an expert. I may be wrong. But none of the sources I’m finding frame the issue as Israel withholding charity or bonus payments or anything similar - they all say Israel is holding Palestinian taxes. I only care about proof, so if you can provide it I’ll check it and if it outweighs the evidence I’ve found and linked I’ll change my mind.
Yep. Reasoning out why its getting framed that way is an exercise I’ll leave up to the readers, but those same sources have confirmed the facts even if they are getting framed differently - the goods are taxed when they get imported into Israel, and the tax is paid by people in Israel. If those good are then exported from Israel to Gaza or the West Bank, then the governments of those places would be within their rights to tax it again. However, the 1994 deal kept that tax burden off the Palestinians while maintaining their access to Israeli logistics and infrastructure as opposed to importing goods from Egypt or Jordan, or shipping them into Gaza directly from the Mediterranean. The governments of Gaza and the West Bank became dependent on the free money, and that gave Israel leverage which it is now choosing to use.
Edit: Just to make sure I was doing my homework, I actually found a copy of the relevant agreement. Read Annex V point 1 (1st page) and Appendix V point 4 (2nd page). Both make it clear that Israel is collecting Palestinian taxes from Palestinians and on purchases made wholly in Palestine with a final destination inside Palestine. Given the very specific language of the agreement, I’m even more sure your assertion that it’s Israeli-sourced money is incorrect.
Your word alone is not enough, and in the absence of requested evidence I’m going to disregard it. I have found MANY sources going back years that state that Israel is collecting Palestinian taxes, as in money that Palestine would be collecting if it wasn’t occupied/was a self-governing nation. Israel also frequently withholds these taxes as a political bludgeon even though they are bound by their own signed agreements to pass that money along to Palestinian authorities. Israel even charges a 3% fee to do this for Palestine. I cannot find a single source that backs up your assertion that it’s actually Israel’s money transferred as an act of charity. Moreover, the idea that Israel is being unnecessarily kind clashes with decades of evidence about how Israel views, controls, and abuses Palestinians.
Well, you see, if you steal something you sort of own it, and then give it back, that’s an act of charity. It’ makes perfect sense if you frame it that way.
You don’t need to take my word for it. Its spelled out in the agreement that you’ve provided a link to, in Annex V.1.a.
The companies importing the goods into Israel pay the tax - that’s how excise taxes work. Israel agreed to give an amount of that tax revenue to the governments of Gaza and the West Bank, and that amount was calculated based on how much of those goods would later be exported from Israel to Gaza and the West Bank. Without the agreement, the governments of Gaza and the West Bank would be underfunded unless they levied their own import and excise taxes, which would have the effect of increasing prices for Palestinians.
Israel agreed to the deal that kept prices low for Palestinians and provided funding for the governments of Gaza and the West Bank at Israel’s expense. A cynic might believe they did so, at least in part, to cause dependency and to gain leverage rather than exclusively out of a spirit of humanitarianism, nevertheless they did agree to the deal and it did materially help the Palestinians and the governments of Gaza and the West Bank.
Those are some mental gymnastics, to try to tell me that when a Palestinian purchases fuel or other products in Palestine and the tax money goes to Israel that it’s not Palestinian taxes. That it’s Israeli money and is only returned (or sometimes not) because Israel is kind to Palestine. Or that when Israel collects the taxes on a Palestinian’s job located in the OPT, i.e. all work is done outside Israeli borders, that it’s not Israel collecting Palestinian taxes.