Israel Withholds Palestinian Clearance Funds, Deepens Financial Crisis
A statement issued by the office of Israeli Finance Minister Bezalel Smotrich said that a significant portion of the tax revenues Israel collects on behalf of the Palestinian Authority was offset to settle outstanding debts.
“Out of a total of more than 740 million shekels ($248 million) collected this month, extensive deductions totaling approximately 590 million shekels ($197.7 million) were made,” the statement said.
“These funds were redirected to cover the Palestinian Authority’s accumulated debts to the Israel Electric Corporation, water utilities, and environmental bodies,” it added.
Officials further indicated that the remaining funds were frozen and not transferred. This step aligns with a policy led by Smotrich since last year, described as a response to actions taken by the Palestinian Authority against Israel in international forums, according to reports.
Clearance revenues consist of taxes levied on goods entering Palestinian territories—either via Israel or through crossings under Israeli control—which are collected by Israel and later transferred to the Palestinian Authority.
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