Europe Warns Tax Cuts Could Weaken Palestinian Authority

Europe Warns Tax Cuts Could Weaken Palestinian Authority

Tuesday, 6 November, 2018 - 08:45
Israeli soldiers take up position during clashes with Palestinians near Qalandiya checkpoint near the West Bank city of Ramallah on July 19, 2017. (Reuters)
Ramallah - Kifah Zboun
The United Nations and the European Union have rejected Israeli plans to deduct funds from Palestinian tax revenues, which Israel usually collects for the Palestinian Authority (PA) in exchange for an agreed rate.

UN Middle East envoy Nickolay Mladenov and European officials have warned Israel that the PA could collapse if Israel implemented plans to deduct salaries, based on the “terrorists’ salaries deduction law”, which was recently approved by the Israeli Knesset.

In letters addressed to the Israeli political leadership, Mladenov and EU officials said that the implementation of any cuts would lead to a point of collapse and even undermine Palestinian institutions due to the deteriorating economic situation in the Palestinian territories in light of the PA’s fiscal deficit, in parallel with the intention of some donor countries to discontinue the provision of grants.

The warnings came following an Israeli decision to deduct the value of the money paid by the Authority to the families of “prisoners and martyrs”.

The secretary general of the PLO’s executive committee, Saeb Erekat, said that Israel had informed the PA of transferring funds from tax revenues for the Gaza Strip, if the Authority did not fully transfer the previous allocations to the sector.

“Cutting off US aid to the Palestinian Authority and talking about humanitarian aid to the Gaza Strip, in addition to other measures, are only aimed at pushing for the separation of the West Bank from Gaza,” Erekat said during a conference in Ramallah.

He accused the current Israeli government, headed by Benjamin Netanyahu, of seeking to replace the two-state solution by “the principle of the two systems based on the Apartheid regime through the enactment of racist laws in the Knesset.”

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