Photo Credit: Yonatan Sindel/Flash90
Prime Minister Naftali Bennett at the Knesset plenum, August 2 2021.

One month after the Political-Security Cabinet approved the decision not to transfer terrorist funds to the Palestinian Authority, on Monday morning Israel transferred the tax money it collected on behalf of the Palestinian Authority after offsetting NIS 100 million ($31 million). The offset was made in accordance with the cabinet decision and according to a calculation presented by the IDF and the Finance Ministry as an estimate of the sums of money the PA transferred to the families of terrorists between the years 2019-2020.

According to a law passed in 2018, the defense minister is charged with presenting at the end of each year the total money paid out by the Palestinian Authority to terrorists and their families during that year, and in the following year, an equal amount shall be frozen out of the taxes Israel collects for the PA, in accordance with the Paris Agreement.


But in years past, the Netanyahu government did not keep up with the requirements of the 2018 law that it initiated, and, in fact, in March 2020 transferred NIS 800 million ($248 million) to the PA to help it deal with its economic crisis following the Corona pandemic. But as right-wing news website Hakol HaYehudi pointed out back then, the main reason that led to the PA’s economic crisis was the transfer of more than one and a half billion shekels each year as wages to terrorists who carried out attacks against Jews.

The Bennett cabinet decided to move ahead with freezing those terrorist wages and restarting the monthly payments of collected taxes sans the terrorist payments to the PA, which is facing a collapse over not paying its public employees for several months. In the past, Chairman Mahmoud Abbas refused to receive the discounted funds from Israel, but he appears to have softened over time and now he’ll take whatever Israel gives him.

According to the report that was prepared by the Defense Ministry’s Economic Warfare Headquarters, in 2020 the Palestinian Authority paid out NIS 597 million ($185 million) as indirect support for terrorism. Following the approval of the report, 1/12 of these funds will be frozen every month from the money that Israel transfers to the PA.

In 2019, after Israel had passed the law, the PA for many months refused to accept the discounted tax revenues and would not confirm the receipt of the amount transferred from Israel to its account, which brought it to the brink of an economic crisis. In his speech at the UN General Assembly that year, Abbas said that the PA would continue to pay the families of terrorists, even if these were the last funds in its hands.

Now he’s willing to deal. There may be a lesson in there for Israeli politicians.


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