Sending the Palestinians to bed without dinner

By withholding the PA’s tax revenues, the Israeli government is effectively stealing Palestinian money. So why won’t the international community call it that?

Palestinian policemen block protesters during a demonstration against the visit of US President Barak Obama to the West Bank, Ramallah, March 21, 2013. (photo: Keren Manor/
Palestinian policemen block protesters during a demonstration against the visit of US President Barak Obama to the West Bank, Ramallah, March 21, 2013. (photo: Keren Manor/

At the end of last year the Israeli government announced that it would stop transferring Palestinian tax revenue to the Palestinian Authority. The move was explained, explicitly, as a punitive measure for the Palestinian ascension to the International Criminal Court. Conveniently, it also happened to take place at the start of Israel’s fast-paced election season.

The funds in question are tariffs and customs fees that Israel collects on behalf of the Palestinians, which the Palestinian Authority cannot collect for itself, since Israel won’t allow it to control any sea or air port. The goods that are being taxed merely pass through Israel. According to the Paris Protocols, the economic section of the Oslo Accords, the tax money is Palestinian; Israel is just a middle man.

So when Israel refuses to transfer the Palestinian tax revenue, it is stealing. Except nobody calls it that, for two reasons. The first reason is that Israel is not a rogue state in the eyes of most of the world, and states don’t really steal — they have disputes, or they occupy, or nationalize or appropriate.

The second reason is that everyone involved — the Israelis, the Palestinians and the international community — knows that Israel will eventually give the money back. Every year or two, the Israeli government decides to withhold the tax funds, usually in response to some policy decision that doesn’t strike its fancy. It waits a few months until the international pressure grows — and the Palestinian Authority inches toward collapse — before giving it back.

So what does withholding the tax funds accomplish? Firstly, it means that hundreds of thousands of Palestinians lose part of their income. The first thing that the Palestinian Authority slashes when it starts to run out of money is salaries — the salaries of 180,000 civil servants, each of whom supports a family.

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Withholding tax funds, or holding up the monthly income of hundreds of thousands of Palestinian families, is Israel’s way sending the Palestinian Authority to bed without dinner. The Israeli government is saying: your behavior is not acceptable, and although we are not going to do anything too dramatic, we want you to hurt for a little bit.

The Palestinian Authority relies on Israel for everything: its imports and exports, the very taxes it collects, the freedom of movement of everyone from a sheep herder in the south Hebron Hills to Mahmoud Abbas himself (let’s not forget the siege on Yasser Arafat in the Muqata’a), and the weapons with which it polices on Israel’s behalf. And the PA serves Israel’s interests, making its occupation easier by administering West Bank cities, arresting militants who threaten Israel, and even by levying high value added taxes on its citizens in order to avoid creating too much competition for in Israel’s very own captive market.

If the idea of two parties with such a skewed power dynamic negotiating with each other didn’t seem absurd in 1993, it certainly should 22 years later. Joining the ICC was one of a number of ways that the PA has been attempting to change that.