Author: Steven Scheer
JERUSALEM (Reuters) – Israel plans to use tax revenue it collects on behalf of the Palestinian Authority to pay the PA’s nearly 2 billion ($544 million) debt to state-owned Israel Electric Co (IEC), Finance Minister Bezalel Smotrich said on Sunday.
Israel collects taxes on goods passing through Israel into the occupied West Bank on behalf of the PA and transfers the revenue to Ramallah under a long-standing agreement between the two sides.
Since the October 7, 2023, attack on Israel by Hamas sparked the Gaza war, Smotrich has withheld the amounts earmarked for administrative expenses in Gaza.
Those frozen funds are being held in Norway and, he told a cabinet meeting on Sunday, will instead be used to pay a 1.9 billion shekel debt to the IEC.
“The procedure was carried out after several anti-Israel actions and included Norway’s unilateral recognition of the Palestinian state,” Smotrich told cabinet ministers.
“The PA’s debt to the IEC resulted in high loans and interest, as well as impaired IEC credit, which was ultimately passed on to the citizens of Israel.”
The ultranationalist Smotrich opposed sending funds to the PA, which uses the money to pay salaries in the public sector. He accuses the PA of supporting the October 7 attack in Israel by the Islamist movement Hamas, which controls Gaza. PA currently pays 50-60% of salaries.
Israel is also confiscating funds equal to the total amount of so-called martyrs’ payments, which the PA pays to the families of militants and civilians killed or imprisoned by Israeli authorities.
There was no immediate comment from PA.
(1 USD = 3.6763 shekels)
