BICOM

Israel has reached an agreement with the Palestinian Authority (PA) over the tax funds which it collects on behalf of the PA, but had withheld for several months due to a dispute.

It was announced over the weekend, that Israel will hand over in excess of £300 million in taxes to the PA. Israel initially froze the tax funds in January in protest over the PA’s decision to join the International Criminal Court, with the intention of launching criminal cases against Israelis.

However, with the PA apparently struggling to pay its employees, Israel earlier this month agreed to unfreeze money collected between December and February. Yet, the PA refused to accept the money, as Israel had deducted an amount to offset debts which it owes to Israeli suppliers. The Israel Electric Company alone, is thought to be owed around £34million.

A compromise appears to have been reached over the weekend, after a meeting between Coordinator of Government Activities in the Territories, Maj Gen Yoav Mordechai and his Palestinian counterpart. According to Haaretz, they agreed a “major offsetting” on funds from December, January and February to cover Palestinian utility debts, with a more minor adjustment set for March and April. PA President Mahmoud Abbas informed the Palestine Liberation Organisation (PLO) of the agreement on Saturday and said that a joint Israeli-Palestinian committee would be formed to discuss outstanding sums.

Meanwhile, an unnamed top Israeli official is quoted by Ynet, saying “Despite the fact that the Palestinian Authority broke its agreements, Israel decided that transfer the money because of our responsibility to regional stability and humanitarian considerations.”

Israel has taken several recent steps to ease Palestinian movement and encourage development. Bureaucratic systems were circumvented to ensure the new Palestinian town of Rawabi joins the water grid, while last month it was announced that Palestinian men aged 55 and older would be allowed entry into Israel from the West Bank without a permit.