WarSclerotic

Palestinian Authority President Mahmoud Abbas has rejected all tax revenue payments transferred to the PA by Israel, in response to Jerusalem withholding over $138 million of the amount over Ramallah’s payouts to Palestinian attackers and their families.

The dramatic move means the PA is rejecting a large portion of its monthly income, which could lead to its financial collapse. Palestinian officials said Israel currently collects and transfers NIS 803,282,580 ($222 million) to the PA every month, Reuters reported.

Israel’s security cabinet on Sunday approved withholding NIS 502,697,000 ($138 million) from a year’s worth of taxes that Israel is slated to collect on the PA’s behalf.

The security cabinet’s decision was an effort to start implementing a new law that permits Israel to withhold tax money due Ramallah over payments it makes to security prisoners held by Israel and the families of slain attackers, including terrorists.

“We refuse to receive all of the tax funds. We don’t want them. Leave them over with them,” Abbas told a delegation of US Congress members and the dovish Jewish organization J Street at the PA presidential headquarters in Ramallah on Tuesday.

“I tell you honestly that if we only had 20 or 30 million shekels, which is what is paid [monthly] to families of martyrs, we will give them to the families of martyrs. I mean if the [Palestinian] Authority doesn’t have anything other than that [amount], I will pay it to the families of martyrs and prisoners and wounded persons. This needs to be understood,” he said, according to recordings of comments aired Wednesday on Voice of Palestine, the official PA radio station.

Palestinians hold portraits of relatives jailed in Israeli prisons as they protest to demand for their release during a demonstration to mark the Prisoners’ Day in the northern West Bank city of Nablus on April 17, 2018. (AFP PHOTO / JAAFAR ASHTIYEH)

“In addition, I will turn to all international institutions to complain. Perhaps the world will hear me,” Abbas added.

A high-ranking Palestinian official insisted on Tuesday that the Palestinians cannot stop its payments to security prisoners or the families of slain attackers, calling such a move “political suicide.”

“These payments are one of the most sensitive issues in Palestinian society,” the official, who spoke on condition of anonymity, told The Times of Israel. “If the PA were to get rid of them, it would be committing political suicide, especially considering the difficult political situation.”

Palestinian officials have condemned Israel for moving to withhold the half billion shekels, arguing it amounts to “piracy” of Palestinian funds.

Israeli officials have defended the security cabinet’s decision, arguing that the PA’s payments incentivize violence and terrorism.

Avi Dichter, the chair of the Knesset Defense Committee, has said Israel will spread out the withholding of the tax money over 12 months.

If Israel continues to collect a sum of taxes equivalent to that provided in the Reuters report, it will withhold approximately five percent of what it now transfers to the PA on a monthly basis.

Abbas’s rejection of all tax revenues could mean a PA forfeiture of hundreds of millions of shekels each month – several billion a year, and perhaps as much as a third of the PA’s total budget, as Times of Israel analyst Avi Issacharoff pointed out this week.

“It could mean, in other words, the de facto collapse of the PA,” he wrote. “When the PA threatened to do so in the past, Israel caved each time, fearing a spike in violence that could ensue after the PA’s disappearance. But Israel is now in the middle of an election, in which a right-wing incumbent government could find itself politically unable to appear to cave to the Palestinian threat.”

Polls have found that the overwhelming majority of Palestinians oppose the PA suspending its payments to security prisoners, including terrorists who have killed Israeli civilians.

Prime Minister Benjamin Netanyahu chairs the weekly cabinet meeting at the Prime Minister’s office in Jerusalem, February 17, 2019. (AP Photo/Sebastian Scheiner, Pool)

A survey published in July 2017 by the Palestinian Center for Policy and Survey Research found that 91 percent of Palestinians were against halting the payments.

Israeli security officials have long supported strengthening the PA and have argued that initiatives to weaken it could destabilize the situation in the West Bank and hinder the ability of PA security forces to fight terrorism.

Adam Rasgon contributed to this report.