Palestinian President Mahmoud Abbas and Prime Minister Yair Lapid

Israel to withhold Palestinian tax revenue over payments to terrorists

Ministers vote to offset hundreds of millions in taxes Jewish state collects on behalf of the Palestinian Authority over controversial stipends paid out to terrorists and their families

Itamar Eichner |
Published: 07.31.22, 22:14
Israeli ministers voted on Sunday to withhold hundreds of millions of dollars in tax revenue from the Palestinian Authority (PA) for its policy of paying out stipends to people killed or imprisoned in fighting with the Jewish state and their families.
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  • Israel, which collects taxes on behalf of the PA, will offset approximately NIS 610 million ($175 million) in 12 installments.
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    יאיר לפיד אבו מאזן חצי חצי
    יאיר לפיד אבו מאזן חצי חצי
    Palestinian President Mahmoud Abbas and Prime Minister Yair Lapid
    (Photo: AP, GPO)
    Israel also withheld a similar sum in Palestinian tax revenue last summer — this according to a 2018 law that requires the country to deduct stipends paid out by the PA to Palestinian terrorists and their families.
    Israelis say the payments encourage violence, while the Palestinians say the funds assist distressed families.
    The move was approved almost unanimously, with the exception of Health Minister Nitzan Horowitz who abstained.
    Horowitz, who heads the dovish Meretz party, said that he considered the move 'unwise' since Israel repays the money to the Palestinians through loans, and that Israel has an interest in continued security cooperation with Palestinian authorities.
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    ניצן הורוביץ
    ניצן הורוביץ
    Health Minister Nitzan Horowitz
    (Photo: Moti Millrod)
    Transportation Minister Merav Michaeli said that the PA was willing more than ever to stop payments to terrorists and their families and that Israel could capitalize on that to secure a significant diplomatic achievement.
    In April, the High Court of Justice ruled that the PA can be held liable for terrorist acts due to the controversial policy.
    Justice Yitzhak Amit, setting out the majority ruling, found that the decision to pay convicted Palestinian terrorists and those killed as part of the “struggle against Israel” makes the PA liable for their actions.
    “[The PA] expresses its consent to their actions, in a manner that takes responsibility for the acts. This justifies that [the PA] will be assigned personal and direct responsibility,” Amit wrote.
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