Smotrich confirms Finance Ministry hasn’t transferred any tax revenues to PA for past year

Palestinian Authority prime minister says Israeli policy is meant to ‘destroy institutions of the State of Palestine,’ has left PA cash-strapped and unable to pay employees

The Finance Ministry confirmed that it has not released Palestinian Authority tax revenues for a year, after PA Prime Minister Mohammad Mustafa said that the lack of transfers has left the authority cash-strapped and unable to pay employees.

Speaking at a press conference Sunday marking the conclusion of local elections in PA areas the previous day, Mustafa said, referring to Israel, “The occupation has been cutting our funds for years, but the intensity of the cuts has increased over the past 12 months.”

He added, “In the past year, not a single shekel of tax revenues has been transferred to us. We are living without tax income in an attempt to destroy the institutions of the State of Palestine. All residents are suffering, particularly PA employees.”

The funds in question are tax revenues on goods entering Israel that are destined for the Palestinian Authority. Israel collects these funds and is supposed to transfer them to the PA, which is based in the West Bank city of Ramallah and governs daily affairs in the territory’s Palestinian population centers, under the terms of the 1990s Oslo Accords. The revenues account for roughly 60 percent of the PA’s income.

Finance Minister Bezalel Smotrich confirmed that he had withheld April’s clearance revenues, totaling NIS 740 million ($248.7 million), continuing a policy that has been in place for about a year.

Smotrich is an adamant opponent of Palestinian statehood and has called for the PA to be dismantled.

On April 19, the Palestinian Authority Finance Ministry announced in an unusual statement that, in light of what it described as Israel “stealing tax revenues” for the past year, all public sector employees would receive only NIS 2,000 ($672) for their January salaries, which were paid with significant delay.

Since 2019, Israel has deducted amounts from tax revenues that are equivalent to the Palestinian Authority’s payments to security prisoners held by Israel and the families of those who carry out terror attacks targeting Israelis. Ramallah insisted that it halted that policy last year.

Beginning in November 2023, following the Hamas-led October 7, 2023, attack and outbreak of the war in Gaza, Israel has transferred only partial funds, also deducting sums the PA had allocated to Gaza (including salaries for former PA employees and services such as electricity and water). The PA said at the time that it would refuse to accept partial transfers.

According to a statement from the Finance Ministry, the remaining funds — beyond those allocated to Gaza — “have been frozen for about a year due to the minister’s policy not to transfer funds to the Palestinian Authority in light of its actions against the State of Israel in the international arena and its support for incitement to terrorism.”

The clearance revenues mainly include import value-added taxes, customs duties, purchase taxes, and fuel excise on goods destined for the West Bank.

The Trump administration has pressed Israel to release the funds, including during Prime Minister Benjamin Netanyahu’s December meeting with US President Donald Trump in Florida.

Despite the US pressure, the premier has refrained from bringing the matter before the cabinet. In November, he shelved plans to prevent Smotrich from trying to collapse the Palestinian Authority, after the far-right minister threatened to resign and bring down the government.