PA needs Arab safety net to overcome Israeli tax freeze
The Palestinian Authority said it would not abandon its efforts to join international treaties, despite Israel's decision to freeze the transfer of tax revenues, a step considered a pressure card by Palestinian officials.
RAMALLAH, West Bank — Almost two weeks into January have passed and the Palestinian Authority (PA) has yet to pay the salaries of its employees and fulfill its financial obligations, a result of Israel freezing the transfer of tax revenues on Jan. 3.
Chief Palestinian negotiator Saeb Erekat slammed the Israeli decision as a war crime. The PA heavily counts on tax revenues of a monthly average of $170 million, which accounts for 65% of the salaries bill.
These tax revenues are collected by Israel on behalf of the PA on exported and imported goods in return for a 3% commission. This implies a weak Palestinian economic resilience in light of the freezing of tax revenues and in the absence of alternatives.
The Palestinian government believes Israel's decision is an act of piracy and collective punishment. Its spokesman, Ehab Bessaiso, told Al-Monitor, “Any Israeli decision to freeze tax funds falls within the scope of the collective punishment policy.”
