Israel to make use of withheld Palestinian tax earnings to pay electrical co debt

By Steven Scheer

JERUSALEM (Reuters) – Israel plans to make use of tax income it collects on behalf of the Palestinian Authority to pay the PA’s practically 2 billion shekel ($544 million) debt to state-run Israel Electrical Co (IEC), Finance Minister Bezalel Smotrich mentioned on Sunday.

Israel collects tax on items that cross by means of Israel into the occupied West Financial institution on behalf of the PA and transfers the income to Ramallah beneath a longstanding association between the 2 sides.

For the reason that Hamas-led assault on Israel on Oct. 7, 2023, triggered the battle in Gaza, Smotrich has withheld sums earmarked for administration bills in Gaza.

These frozen funds are held in Norway and, he mentioned at Sunday’s cupboard assembly, would as a substitute be used to pay debt owed to the IEC of 1.9 billion shekels.

“The process was applied after a number of anti-Israeli actions and included Norway’s unilateral recognition of a Palestinian state,” Smotrich advised cupboard ministers.

“The PA’s debt to IEC resulted in excessive loans and rates of interest, in addition to injury to IEC’s credit score, which had been finally rolled over to the residents of Israel.”

The ultranationalist Smotrich has been against sending funds to the PA, which makes use of the cash to pay public sector wages. He accuses the PA of supporting the Oct. 7 assault in Israel led by the Islamist motion Hamas, which controls Gaza. The PA is at present paying 50-60% of salaries.

Israel additionally deducts funds equal to the entire quantity of so-called martyr funds, which the PA pays to households of militants and civilians killed or imprisoned by Israeli authorities.

There was no instant remark from the PA.

($1 = 3.6763 shekels)