Prime Minister Benjamin Netanyahu
Prime Minister Benjamin NetanyahuOLIVIER FITOUSSI/POOL

Israel has recently cut the tax that it collects from the Palestinian Authority on gas by 50%, Israel Hayom reported. The tax is currently 1.5% instead of 3%, as it had been since the economic agreements between Israel and the PA were signed in 1994.

The reduction, which would help the PA save 80 million shekels from its annual budget, was announced last week by the Coordinator of Government Activities in the Territories last week.

According to the announcement, the other economic concessions that were given by Israel to the PA since the start of 2023 come out to the sum of 270 million shekels. This means a 730 million NIS on-average rise in monthly payments to the PA, compared to only half a million three years ago.

Israel has raised the allowances it takes from the tax payments for the Palestinians, but the authorities are aware that a large amount of the reports are false, and the products are sold in Israeli territory and not in the PA.

For instance, Palestinian importers send false reports, and therefore, Israel transfers hundreds of millions of shekels a year.

In addition, funds were transferred to the PA under the rationale of "considerations" and "greater transparency concerning sales tax." All in all, Israel has transferred a budget of 350 million NIS since the current government came to power.

The decision to cut the tax on gasoline was made a few months ago by Prime Minister Netanyahu. Finance Minister Bezalel Smotrich, who is in charge of the Tax Authority and the IDF Civil Administration, authorized the tax cut with the rationale that it was a promise of Netanyahu's to the US government.

The Biden Administration did indeed pressure Israel to improve the economic situation in Judea and Samaria, claiming that the PA is on the verge of financial collapse. However, Israel's lack of will to do so while PA Chairman Abbas continues to pay the salaries of terrorists caused the US Congress to criticize Israel.