Palestine warns of financial crisis unless Israel releases tax revenues

Middle East Monitor  /  September 23, 2021

The financial which the Palestinian Authority is suffering from is likely to get even more complicated during the coming period unless Israel releases tax revenues it has withheld, the finance minister said.

Speaking during a meeting with donors and foreign representatives, Shukri Bishara reviewed the financial situation of the Palestinian Authority and the pressures exerted by the Israeli government, including withholding and illegally deducting Palestinian tax revenues.

“Mr. Bishara explicitly informed representatives of the international community that the [Palestinian] government had exhausted all available options to secure financing, and will not resort to more borrowing from banks,” a statement issued by the Palestinian Ministry of Finance said.

According to the statement, Bishara stressed on the need to reform the financial relationship with Israel and the tax clearance mechanism, which he said “has become a tool to perpetuate the occupation”.

“Bishara urged the international community to take all necessary diplomatic efforts to urge Israel to respond to the Palestinian demands and called for the return of foreign support to what it was before 2018,” it added.

The minister has also urged donor countries to restore their aid to the Palestinian treasury to the level it was in  2018, explaining that this aid has fallen by 90 per cent in 2021 compared to 2020.

The PA has struggled with finances since 2018 when the US administration of President Donald Trump cut aid to it and to UNRWA, the UN body which supports Palestine refugees in the region.

Israel also began deducting some of the tax revenues it collects on behalf of the PA, which it says was used to pay stipends to the families of martyrs and prisoners who ‘committed terror attacks’ against the occupation.

Current US President Joe Biden restored aid to the tune of $200 million to  the Palestinians when he took office earlier this year.