Israel to Transfer Tax Funds to Palestinians ; Move Reverses Strategy of Withholding Revenue as Punitive Measure

By Kershner, Isabel | International Herald Tribune, January 31, 2013 | Go to article overview

Israel to Transfer Tax Funds to Palestinians ; Move Reverses Strategy of Withholding Revenue as Punitive Measure


Kershner, Isabel, International Herald Tribune


This reverses an earlier decision to use the revenues to offset at least part of the Palestinian debts to Israeli utility companies as a punitive measure.

Israel has decided to transfer tax and customs revenues collected last month on behalf of the Palestinian Authority to help ease the economic crisis there, a senior Israeli government official said Wednesday.

This reverses an earlier decision to use the revenues to offset at least part of the Palestinian debts to Israeli utility companies as a punitive measure following the Palestinians' successful bid to upgrade their status at the United Nations to that of a nonmember observer state in late November.

But the official emphasized that the decision was "a one-time event" and was "not an indication of what Israel might do next month."

The decision to transfer the funds came after a meeting Monday between Prime Minister Benjamin Netanyahu and Tony Blair, the envoy of the so-called quartet of Middle East peacemakers that groups the United States, the European Union, the United Nations and Russia. In a statement after the meeting, both men pledged to work on peace and security issues.

Nour Odeh, a spokeswoman for the Palestinian Authority, said that Palestinian and Israeli officials were scheduled to hold a regular technical meeting Wednesday where they would calculate the amount of revenues collected and owed. Revenues usually amount to around $100 million a month.

The Palestinian Authority, a self-rule body with limited control over parts of the West Bank, has been in financial crisis for about two years, largely because of a drop in donor funds, and it has been struggling to pay its 150,000 government workers their full salaries on time, leading to growing restiveness and strikes.

Israel's decision to withhold the transfers after the United Nations move was expected, but special funds pledged by Arab states to the authority as a so-called "safety net" after the diplomatic clash with Israel have not yet materialized.

Israel has withheld transfers of Palestinian tax revenues at least five times before, sometimes for weeks and, after the outbreak of the Palestinian uprising in 2000, for two years. …

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