JERUSALEM: Israel plans to use tax revenue it collects on behalf of the Palestinian Authority to pay the PA’s nearly 2 billion shekel ($544 million) debt to state-run Israel Electric Co. (IEC), the far-right Finance Minister Bezalel Smotrich said on Sunday.
Israel collects tax on goods that pass through Israel into the occupied West Bank on behalf of the PA and transfers the revenue to Ramallah under a longstanding arrangement between the two sides.
Since the Hamas-led attack on Israel on Oct. 7, 2023, Smotrich has withheld sums earmarked for administration expenses in the Gaza Strip.
Those frozen funds are held in Norway and, he said at Sunday’s cabinet meeting, would instead be used to pay debt owed to the IEC of 1.9 billion shekels.
“The procedure was implemented after several anti-Israeli actions and included Norway’s unilateral recognition of a Palestinian state,” Smotrich told cabinet ministers.
“The PA’s debt to IEC resulted in high loans and interest rates, as well as damage to IEC’s credit, which were ultimately rolled over to the citizens of Israel.”
The ultranationalist Smotrich has been opposed to sending funds to the PA, which uses the money to pay public sector wages.
Israel also deducts funds equal to the total amount of so-called martyr payments, which the PA pays to families of militants and civilians killed or imprisoned by Israeli authorities.
Israel to use withheld Palestinian tax income to pay debt to state-run electric company
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Israel to use withheld Palestinian tax income to pay debt to state-run electric company
- Israel withheld Palestinian Authority's sums earmarked for administration expenses in the Gaza Strip since Oct. 7, 2023