Israel to withhold $43 million of Palestinian tax funds

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The Israeli Security Cabinet on Sunday voted to withhold $43 million of tax funds from the Palestinians, saying the money has been used to promote violence, Israeli media reported.

The sum represents funds that Israel says the Palestinians have used to pay the families of Palestinians who have been jailed or killed as a result of attacking Israel, according to various reports.


Israel says the Martyrs’ Fund rewards violence. The Palestinians say the payments are needed to help vulnerable families who have been affected by violence and Israeli occupation.

Under past agreements, Israel collects customs and other taxes on behalf of the Palestinians and transfers the money to the Palestinian Authority. These monthly transfers, about $170 million, are a key source of funding for the budget of the authority, which administers parts of the Israeli-occupied West Bank.

Israel last year passed a law deducting parts of these transfers that it said were supporting militants’ families. Sunday’s decision was a continuation of that policy.

In February, after Israel withheld $140 million, the Palestinians said they would reject all transfers to protest the Israeli policy. But six months later, with the Palestinian Authority in a deep financial crisis, the sides worked out a deal to resume most of the transfers.

Palestinian official Hanan Ashrawi denounced the latest Israeli move, calling it a “blatant act of theft and political extortion.”

“This is a clear violation of Palestinian rights and signed agreements as well as a criminal act of collective punishment exacted for cynical domestic Israeli political reasons,” she said.

Under interim peace deals from the 1990s, Israel collects taxes on behalf the Palestinians, who put the current sums at $222 million a month. With diplomacy stalled since 2014, Israel has at times withheld money as a measure of protest or pressure.

Palestinian President Mahmoud Abbas, though hit by steep US aid cuts by the Trump administration, has held to paying stipends to the families of Palestinians jailed on security charges and of those killed or wounded by Israeli forces.

Israel and the United States say the policy, which is scaled to give greater monthly payouts for prisoners serving longer sentences, invites violence. Abbas describes the Palestinian inmates and casualties as “heroes” of a national struggle.

“This (Israeli decision) will cost us a lot,” Abbas told members of his Fatah party in the Palestinian hub city of Ramallah. “But we have rights and we will not be afraid.”

The United States passed legislation last year to sharply reduce aid to the PA unless it stopped the stipends. The measure, known as the Taylor Force Act, was named after a 29-year-old American military veteran fatally stabbed by a Palestinian while visiting Israel in 2016.

Washington has further slashed hundreds of millions of dollars to humanitarian organizations and UN agencies which aid the Palestinians as it seeks to pressure Abbas to come back to the negotiating table.

Prime Minister Benjamin Netanyahu’s office declined comment.

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