Israeli Financial Minister Moshe Kahlon and Palestinian Authority (PA) official Hussein Al-Sheikh met this week to discuss the financial crisis rocking the PA in the light Israel’s deduction of funds from its tax revenues, Quds Press reported yesterday.
Reporting the Israeli Public Broadcaster Kan, Quds Press said that the possible economic collapse of the PA could have a negative impact on the Israeli security.
The PA has refused to receive tax revenues since the Israeli government announced that it would deduct $11.3 million from the monthly payments, money it claims is paid for the salaries of martyrs and prisoners’ families as well as salaries of former prisoners.
Palestinian and Israeli sources refused to comment on the meeting and its outcomes, Quds Press said, noting that this is the first meeting since the start of the crisis.
Israel collects about $222 million in taxes on behalf of the PA each month. It deducts three per cent as an administrative charge before transferring the remainder to the PA.
These taxes contribute up to 63 per cent of the total income of the PA. Since it stopped receiving them, the PA has been had to slash employee salaries by half in the West Bank and between 15 to 40 per cent in the Gaza Strip.