Photo Credit: Chaim Goldberg/Flash90
Finance Minister Bezalel Smotrich sells the state's chametz in Jerusalem, April 21, 2024.

Finance Minister Bezalel Smotrich on Monday directed the seizure of Palestinian Authority tax funds and their transfer to families of victims of terror, according to a report published by the Hebrew-language daily edition of Israel Hayom.

Smotrich ordered the Tax Authority to deduct an amount of NIS 130 million ($35 million) from the Palestinian Authority’s tax money, and transfer it to 28 families of terror victims, according to the report.


The Finance Minister had instructed Tax Authority Director Eran Ya’akov this past January to transfer NIS 138.8 million from the funds frozen under the “Law of Freezing of Funds Paid by the Palestinian Authority in Linkage with Terror from the Funds Transferred to it by the Israeli Government, 5778 – 2018.”

The Palestinian Authority has refused for decades to pay compensation to the families of terror victims, despite Israeli court orders directing the Ramallah government to do so.
In recent years, a number of laws have been enacted that opened a legal door to the confiscation of the funds, but the move was opposed by security establishment for fear of harming the financial stability of the Palestinian Authority.

The move came as implementation of a judicial verdict stating the Palestinian Authority should pay the families of terror victims NIS 130 million.

Smotrich decided the funds to be transferred to the families should come from the frozen Palestinian Authority tax funds. The State of Israel collects taxes on behalf of the Palestinian Authority, and then transfers those funds to the Ramallah government. Under the 2018 law, however, a portion of those funds equaling the amount paid monthly by the Palestinian Authority to convicted terrorists incarcerated in Israel, are withheld.

The Palestinian Authority formally provides a monthly salary to every terrorist who attempts to murder Israelis, and higher salaries to those who succeed in the task under what has been dubbed its “pay for slay” policy. The United States Congress has passed two laws mandating the cessation of foreign aid funds to the PA until the Ramallah government stops paying its citizens to kill their neighbors, but the Biden Administration has consistently sought and found ways to circumvent the law.

“There is no greater justice than recompensing out of the funds of the Palestinian Authority that endeavored to support terrorism and transferring them to the families of the victims of terrorism,” Smotrich said in January.

“The Israeli government is changing its policy and today we are starting to rectify it. There is no consolation here for the families of those that were murdered, but justice is implemented by this. I am pleased that I had the privilege of leading this rectifying process as one of my first actions as the Minister of Finance.”

Herzl Hajaj, father of the late IDF Lieutenant Shir Hajaj who was murdered in a Palestinian Authority terrorist attack on January 8, 2017 in the Jerusalem neighborhood of Armon Hanatziv, noted that the families of the terror victims set themselves the goals of preventing further attacks and seizing the funds used by the PA to pay the terrorists.

“This is how we create deterrence; this is how we prevent the next family from bereavement. We ask all the ministers to act to deter the next terrorist,” Hajaj said.

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Hana Levi Julian is a Middle East news analyst with a degree in Mass Communication and Journalism from Southern Connecticut State University. A past columnist with The Jewish Press and senior editor at Arutz 7, Ms. Julian has written for, and other media outlets, in addition to her years working in broadcast journalism.