Israel agrees to withhold less Palestinian tax money

Accord allows Palestinian Authority to collect fuel tax directly, but only partially resolves its financial crisis.

    Palestinian Prime Minister Mohammad Shtayyeh says the additional revenue from the taxes will allow him to raise civil servant pay [Raneen Sawafta/Reuters]
    Palestinian Prime Minister Mohammad Shtayyeh says the additional revenue from the taxes will allow him to raise civil servant pay [Raneen Sawafta/Reuters]

    The Palestinian Authority (PA) says it has reached an agreement with Israel to restore some of the tax funds that Israel withheld in recent months.

    Under Thursday's agreement, the PA says Israel will stop collecting about $60m in monthly fuel taxes on behalf of the PA and instead permit the PA to collect the funds directly.

    Palestinian Prime Minister Mohammad Shtayyeh says the additional revenue will ease a financial crisis and let him increase civil servants' partial salary payments.

    The 160,000 PA employees will receive 60 percent of their August salaries, in addition to what they are still owed from February, according to the official Wafa news agency.

    Earlier this year, Israel began withholding some of the $200m in monthly tax transfers that the Palestinians give to families of people killed or imprisoned during conflicts with Israel.

    The funds withheld are approximately five percent of the total collected on behalf of the PA, but the Palestinians in protest refused to accept any tax revenues from Israel.

    Israel says the payments encourage violence, while the Palestinians argue they assist distressed families.

    SOURCE: News agencies