Photo Credit: Asher Schwartz

(Israel Hayom via JNS) Israel recently slashed the gasoline tax it had been collecting from the Palestinian Authority by 50% as well as taken other measures to ease the financial situation in Ramallah.

The 1994 Protocol on Economic Relations (aka the Paris Protocol) between Israel and the PLO stipulates a 3% rate but Israel has recently decided to collect only 1.5%, as shown in a recent document signed by the Defense Ministry’s Coordinator for Government Activities in the Territories office several days ago. This will save some 80 million shekels ($21 million) for the Palestinian Authority on an annual basis.


Other measures that Israel has taken to help the Palestinians financially since the start of 2023 add up to some 270 million shekels ($71 million). This includes more transfers of taxes collected on behalf of the P.A., amounting to a major increase compared to about half a million shekels only three years ago. This, despite many of the goods ostensibly being sent to the P.A. never making it there because of a fraudulent ploy by importers.

Other financial measures have totaled some 350 million shekels ($92 million) since the new Netanyahu government was sworn in.

The Biden administration has been pressuring Israel to increase the aid to the Palestinian Authority’s economy, saying that the P.A. is on the verge of collapse. But the Israeli willingness to play along despite P.A. leader Mahmoud Abbas continuing to pay terrorists has outraged some members of Congress who also say that the president’s increase of aid to the P.A. violates U.S. law (and specifically the Taylor Force Act (2018), which prohibits funding to the Palestinian Authority so long as the “pay-for-slay” policy continues).

As part of the effort to promote normalization with Saudi Arabia, the U.S. has placed immense pressure on Israel to make it take “steps toward bolstering the P.A.,” which include letting Riyadh send funds to Ramallah. However, there are ways being explored to try to ensure these do not make it to terrorists’ hands.

Originally published by Israel Hayom.


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Ariel Kahana is a diplomatic correspondent for Israel Hayom.