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A Palestinian money exchanger displays money at a market in the West Bank city of Ramallah March 25, 2015. Israel's decision to withhold $130 million a month in revenue collected on behalf of the Palestinians is strangling the economy and leaving the banking system dangerously exposed, the Palestinian central bank governor said on Wednesday. REUTERS/Mohamad Torokman - RTR4UT7Y

PA rejects tax funds deducted by Israel

The Palestinian Authority (PA) once again refused to accept the monthly transfer of tax revenues from Israel on May 2, after Israel deducted the portion earmarked for Palestinian prisoners and families of those killed in resistance activities before depositing the remainder in Palestinian banks in the West Bank.

This is the third month the PA has refused to receive the partial delivery of customs duties on goods imported into Palestine and collected by Israel on its behalf. These funds represent the largest part of Palestinian public revenues at around 700 million shekels ($196 million), after the deduction.

On Feb. 17, Israel began deducting $138 million a year from the tax revenues it collects for the PA in the name of blocking terror funding. In the implementation of the so-called pay-for-slay law passed in July 2018, Israel started in March withholding from the tax revenues it transfers to the PA funds equal to the amount allocated by the PA to Palestinian prisoners and families of Palestinians killed in confrontations with Israel. The law labeled these funds as “salaries” for terrorists.

Under the Paris Economic Agreement signed in April 1994, Israel collects Palestinian tax revenues on goods entering the Palestinian territories through the crossings and ports controlled by Israel. These tax revenues are returned to the PA on a monthly basis.


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