Ramallah: The Palestinian government announced that Israel will release the Palestinian tax revenues it has been withholding after the Israeli elections scheduled for March 17.
According to government spokesman Ehab Bessesso, the PNA has been notified of the move by several influential European states.
“We have tried our best to secure the release of the seized funds before Israeli elections, but it seems that there will be no chance for this to happen as a political decision is required,” he said.
He said immediately after Israel decided to withhold Palestinian tax revenues, the Palestinians launched a campaign to counter the decision and coordinated their efforts with several key countries.
So far Israel has withheld more than two billion Shekels (Dh1.82 billion) of tax revenues that are collected on behalf of the Palestinian government as per the Paris Economic Protocol. As per the agreement, Israel is obliged to transfer tax funds each month to the Palestinian National Authority (PNA) to enable the latter to pay wages to its civil and security workers.
The Israeli move to withhold tax revenues was a punitive measure after the Palestinian leadership signed the Rome Statute and joined the International Criminal Court in The Hague.
The PNA has faced severe economic hardships without the tax money and has not been able to pay full salaries to staff for the past four months. It was able to pay almost half the salaries by borrowing from local banks.
Dr Maher Al Taba’a, an economic expert and analyst, said the PNA is in serious financial trouble and faces a huge debt of $4.8 billion (Dh17.63 billion).
He said that there was a significant increase in the PNA budget between 2007 (the year Hamas took over the Gaza Strip) when the budget was $2.3 billion and 2014 when it was $4.2 billion.
Al Taba’a said an increase in the salaries bill was the direct reason for the budget increase — in 2007, the salaries bill was $1.3 billion, but rose to $2 billion in 2014. The rise occurred despite a direct presidential decree suspending new appointments, promotions and ranks. In addition, the PNA has not conducted any project in the Gaza Strip since 2007.
Dr Al Taba’a said the PNA has not announced its budget for the year 2015 and warned that unless the budget initiates genuine changes in the salaries bill, the PNA will be subject to further economic crises.