Written by Stephen Shear
JERUSALEM (Reuters) – Israel plans to use tax revenues it collects on behalf of the Palestinian Authority to pay off the PA's debt of about $2 billion ($544 million) to the state-run Israel Electricity Corporation, Finance Minister Bezalel Smotrich said on Sunday.
Israel collects taxes on goods that pass through Israel into the occupied West Bank on behalf of the Palestinian Authority and transfers the revenue to Ramallah under a long-term arrangement between the two sides.
Since the Hamas-led attack on Israel on October 7, 2023 led to the outbreak of war in Gaza, Smotrich has withheld funds allocated for administrative expenses in Gaza.
He said at a cabinet meeting on Sunday that these frozen funds are being held in Norway and will instead be used to pay off the NIS 1.9 billion debt owed to the Israel Electric Corporation.
“This measure was implemented after several anti-Israel actions, including Norway's unilateral recognition of the Palestinian state,” Smotrich told government ministers.
“The Palestinian Authority’s debt to the Israel Electric Company led to higher loans and interest rates, as well as damage to the Israel Electric Company’s credit, which was ultimately transferred to the citizens of Israel.”
The ultra-nationalist Smotrich opposes sending money to the Palestinian Authority, which uses the money to pay public sector wages. He accuses the Palestinian Authority of supporting the October 7 attack in Israel led by the Islamist Hamas movement that controls Gaza. The Palestinian Authority currently pays between 50 and 60% of salaries.
Israel also deducts funds equal to the total amount of so-called martyr payments, which the Palestinian Authority pays to the families of militants and civilians killed or imprisoned by Israeli authorities.
There was no immediate comment from the Palestinian Authority.
($1 = 3.6763 shekels)
