Israel violates Paris protocol by refusing to transfer taxes to the PA

The Israeli cabinet put into effect a law which denies the transfer of Palestinian-generated taxes collected by the Jewish State on behalf of the Palestinian Authority (PA) by freezing PA funds on Sunday. The move violates the Paris Protocol on Economic Relations, an agreement signed between the two political entities in 1994. 

Tel Aviv’s recent political play aims to punish the PA for its welfare payments made to political prisoners and those who lost family members to Israel’s military operations. Some called the payments as “pay for sly”, however most Palestinians regard it as a way to survive against Israeli aggression.  

The Palestinian tax revenues amount to an estimated $100 million per month.

Israel says it will deduct about 500,000,000 shekels ($138,222,500) from Palestinian tax revenues because the amount corresponds to the welfare payments the PA made to families and prisoners who Tel Aviv regards as terrorists. 

The stark political difference between the Palestinians and Israelis on the aim of welfare payments has long been debated and is unlikely to be easily reconciled between them, as long as one stays as an occupying force and another as occupied people. 

The law was enacted in the Knesset - the Israeli parliament - in July and requires the defence ministry to report to the cabinet Palestinian welfare payments, which it describes as being made to “terrorists and their families”. Then, according to the defence ministry report, Tel Aviv would deduct that amount from Palestinian revenues, the law stated.

PA President Mahmoud Abbas, who has been much criticised by a significant portion of Palestinians for accommodating Israeli demands, said: “We strongly condemn any deduction of Palestinians’ money”. He described Israeli Prime Minister Benjamin Netanyahu’s move as another “robbery of the Palestinian people”. 

His spokesman Nabil Abu Rudeineh also condemned the Israeli deduction, saying: “The Palestinian leadership will not agree to any moves against the money of the hero prisoners and the families of those killed or wounded.”

Netanyahu, who faces stiff competition in the upcoming elections in April, hopes to appease his hardline base with the implementation of the law.  

Blocking its own tax revenues to the PA is one of the oppressive techniques Israel has employed to defund Palestinians and their resistance movement. 

Without a state and its military instruments to defend the Palestinian population against Israeli aggression, many Palestinians have relied on the resistance movement to ensure their dignity and a better future. 

As a result, demanding the PA cut welfare payments to resistance families and prisoners creates a red line that Abbas and his cabinet can not pass easily in the face of growing Palestinian anger. 

Paris economic protocol 

The Paris economic protocol was one of the consequences of the Oslo Accords signed between Palestinians and Israel in mid 1990s, which has created the formation of the PA, regulating its finances and tax system. 

According to the protocol, Israel collects taxes on behalf of the PA in the occupied territories, and transfers the revenues generated from them to the PA. 

By refusing to transfer Palestinian tax revenues, Israel grossly violates the terms of the protocol, which does not put any restrictions on how Palestinians spend their own revenues. 

The protocol has established the Israeli currency in all Palestinian territories, banning the PA from issuing its own currency.  The agreement has also facilitated total Israeli control over Palestinian borders, allowing Tel Aviv to collect customs, which included both export and import taxes. 

Beyond giving Israel sole control over Palestinian land trade through border crossings, the agreement has also ensured all Palestinian trade with the outside world is through Israeli seaports and airports. 

With the latest move, Israel has signalled it also wants to control where the PA can use its own population’s tax revenues.