The Israeli parliament (Knesset) on Wednesday approved in first reading a bill that would allow for the freezing of additional tax revenues for the Palestinian Authority, a move expected to increase financial pressure on the authority.
The Israeli Haaretz The daily reported that the law would authorize the state to freeze additional Palestinian funds. Under the proposal, submitted by Likud party leader Mose Passal, Israel would freeze an amount each year equal to the funds transferred to Gaza by the Palestinian Authority the previous year.
A Haaretz According to the bill, the frozen money would be used to pay compensation to individuals who were affected by „terrorist acts” originating from Gaza.
The bill was supported by 12 members of the 120-member Knesset present, with no votes against. The bill will now be sent back to the parliament's Foreign Affairs and Defense Committee for further discussion before being sent to the second and third readings, which are essential for it to enter into force.
A Haaretz reported that Israel is currently withholding approximately 14 billion shekels ($4.6 billion) in tax revenues collected on imports destined for the Palestinian territories, known as „clearance funds.” Israel justifies the withholding by saying that the funds are used to encourage and support terrorism.
The newspaper added that while the withheld amounts continue to accumulate in the Israeli treasury every month, the Palestinian government in Ramallah has been forced to introduce further austerity measures to cope with the financial crisis that has lasted for almost three years. Haaretz According to reports, the total withheld amount has been accumulating since 2019, with approximately 400 million shekels ($131.41 million) added to the budget each month.
