Israel to Transfer Tax to PA

Israel announces that the frozen tax money will be transferred to the PA, after confirmation was received that it will not be given to Hamas.

Elad Benari , | updated: 04:15

Finance Minister Yuval Steinitz
Finance Minister Yuval Steinitz
Israel News photo: Flash 90

Finance Minister Yuval Steinitz has instructed his staff to meet with representatives of the Palestinian Authority in order to discuss renewing the transfer of taxes Israel collects on behalf of the PA, the Finance Ministry announced late Sunday night.

It a statement it released, the Ministry noted that the decision to renew the tax transfer was reached after it was clarified by the PA that the money would not be transferred to Hamas and will not go towards funding terror activities.

However, Steinitz clarified in the statement that Israel “reserves the right to take out a ‘red card’ and re-freeze the transfers if it is discovered the money is indeed funding terror activity.”

Steinitz had announced the freeze of the transfer of taxes and fees to the PA two weeks ago, after Fatah and Hamas signed a unity pact. He said that the money would stay in Israeli hands until it becomes clear the funds will not reach the coffers of the Hamas terrorist organization.

Israel collects more than one billion dollars per year on behalf of the PA, comprising some two-thirds of the entity's annual budget.

Last week, PA leadership voted to ask “all international bodies, including the UN Security Council” to intervene in order to lift an Israeli freeze on transfers of tax revenues.

Meanwhile, PA Chairman Mahmoud Abbas has threatened to advance his timetable for asking the UN for a unilateral declaration of PA statehood if Israel stops the flow of tax funds to the PA.

Prior to the Finance Ministry’s announcement on the renewal, diplomatic sources hinted that Israel may transfer the tax money to the PA in the coming days. According to the sources, the decision was made following a consultation between Prime Minister Binyamin Netanyahu and the forum of seven ministers.

Voice of Israel Radio reported that Netanyahu might be interested in presenting U.S. President Barack Obama with the data on the transfer of the tax money during their meeting in Washington this weekend. This would be considered a step of goodwill on Israel’s part, with the hope that it will lead to progress in talks with the Palestinian Authority, noted the report.

Earlier on Sunday, Steinitz himself hinted at the decision during remarks he made in a ceremony in which he received recognition for his struggle to maintain public interest on the issue of gas royalties at a conference at the Academic Center of Law and Business in Ramat Gan.

“I’ve defined this as a yellow card that was issued to the Palestinians and said that if necessary, we will issue a red card,” Steinitz said, adding that “in recent days we have been examining different clarifications we have received and if they satisfy us, we will consider the renewal of transfer of funds to the PA.”