Bezalel Smotrich, Israel’s far-right finance minister, said on Thursday that he had ordered about $35 million in taxes collected by Israel on behalf of the Palestinian Authority to be transferred to the families of terrorism victims in Israel. Israel.
Mr. Smotrich called decide to transfer capital “justice” in a post on social networks and said that the amount was based on a court ruling awarding compensation to relatives of terrorism victims. “The Palestinian Authority encourages and supports terrorism by paying the families of terrorists, prisoners and released prisoners,” he wrote.
Earlier this month, two laws went into effect allowing victims of terrorism and hostilities to claim Palestinian funds, facilitating the action Mr. Smotrich took on Thursday.
The move further endangers the West Bank-based Palestinian Authority, which is already struggling economically, and it could stoke tensions in a territory that is seeing a sharp increase in conflict and The quality of life for Palestinians has declined since October 11. 7 The Hamas-led attack on Israel sparked war in the Gaza Strip.
Matthew Miller, a US State Department spokesman, called Mr. Smotrich’s decision “extremely wrong” and said the Biden administration has made clear to the Israeli government that “these funds belong to the Palestinian people.” Smotrich’s order “risks destabilizing the West Bank and further harming Israel’s own security,” Mr. Miller said at a news conference in Washington.
Under decades-old agreements, Israel collects customs duties and import taxes on behalf of the Palestinian Authority. These revenues make up the bulk of the Palestinian budget, especially as international aid has declined.
Mr. Smotrich – who has branded the Palestinian Authority an “enemy” – has refused to fund the administration, using his power over the administration’s purse to worsen the economic situation in a region that was in financial decline.
Before October 7, about 150,000 Palestinians living in the West Bank worked every day in Israel, but after the war began, Israel imposed a general ban on their employment, leading to an increase in unemployment in the West Bank. strong. Some Israeli businesses have qualify for an exemptionbut the ban has led to a labor shortage in Israel and a worsening economic struggle for Palestinians.
Experts have warned that penniless to pay security forces and other government employees, the Palestinian Authority’s economic troubles could lead to more instability in the West Bank and in Israel.
In May, Mr. Smotrich said he would withhold tax revenue from the administration after Ireland, Norway and Spain decided to recognize a Palestinian state and after the International Court of Justice said it would seek arrest warrant for Israeli Prime Minister Benjamin Netanyahu and Defense Minister Yoav Gallant over the war against Hamas in Gaza. Mr. Smotrich accused the Palestinians of using “political terrorism” against Israel in the international community.
The finance minister also threatened that by the end of June he would withdraw compensation granted to Israeli banks transferring funds to financial institutions in the West Bank, a safeguard that ensures Israeli banks will not punished for having ties to terrorism. This is expected to reduce deposit activity in Palestinian accounts, including from Israeli companies working with the Palestinian Authority, and could further destabilize the authority and the West Bank. .
Mohammad Mustafa, newly inaugurated Prime Minister of the Palestinian Authoritywarned last month that the dire financial situation was contributing to a “very serious moment” in the West Bank.
Mr. Mustafa met European Union officials on Thursday to discuss the sixth EU-Palestine Investment Platform. He said that deduct tax revenues of Israel is a major challenge and has asked its European allies for help in this regard, according to Palestinian news agencies.
Michael Levenson Report contributions.
