Israel suspends tax transfer to PA

Treasury halts transfer of customs funds, taxes collected by Israel on behalf of PA, is what seems as sanctions over surprise deal with Hamas. Fatah official slams decision as "financial piracy"

Elior Levy|Last update: 05.01.11 , 13:59

Israel has suspended the transfer of tax revenue to the Palestinian Authority in response to its alliance with Hamas, Yedioth Ahronoth reported Sunday.

Finance Minister Yuval Steinitz has apparently cancelled the latest routine handover of some NIS 300 million (approx. $88 million) in customs funds and other levies collected on behalf of the Palestinians, as stipulated in the Oslo Accords.

Financial Aid

World Bank to give Palestinians $10M

AFP

As new Fatah-Hamas unity deal raises questions over continued Western aid, international body says funds will go to 5,500 families in West Bank, Gaza

World Bank to give Palestinians $10M

Israel said last week that it would impose sanctions in response to Palestinian President Mahmoud Abbas' surprise announcement of a unity deal with Hamas.

Palestinian Prime Minister Salam Fayyad said that Israel's decision will not impede the unity deal between the Palestinian factions.

Fayyad, speaking with the Palestinian WAFA news agency, added that "the PA has contacted some very influential elements worldwide, to try and convince Israel not to take this step. We are determined to see the reconciliation through despite this decision."

Fatah Central Committee member Saeb Ereket denounced the decision, calling it "financial piracy."

"The Israeli decision is financial piracy that reflects Israel's dangerous intentions," he Erekat, adding that Jerusalem has no right to interfere with internal Palestinian affairs.

A Treasury spokeswoman refused to confirm the report, or other reports suggesting Israeli officials would also cancel talks with the Abbas administration aimed at updating the tax transfer mechanism between Israel and the PA, which provides it with $1 billion to $1.4 billion annually – two-thirds of its budget.

Steinitz said Sunday that his ministry did not cancel the funds transfer, but rather only suspended it temporarily: "We decided to postpone the meeting until the situation becomes clear.

"We need to know if these funds will now find their way to Hamas, possibly to fund the purchase of rockets that will then be fired on the south. The burden of proof lies with the Palestinian Authority, so show that not even one shekel is given to Hamas and funds terror."

The Palestinians, he added, "will have to choose between sharing funds with Hamas and the continuing collaboration with Israel and the rest of the world."