Israel and the Palestinian Authority yesterday signed agreements to regulate bilateral trade and taxation. According to reports in Haaretz, the agreements were worked out over a series of secret meetings that lasted more than a year.
The bilateral agreements, signed by Israel’s Finance Minister Yuval Steinitz and PA Prime Minister Salam Fayyad, is meant to provide a framework for implementing existing economic agreements, particularly the 1994 Paris Protocol, in order to expand trade and combat smuggling and tax evasion. The agreements will also upgrade the PA’s tax collection infrastructure, thereby increasing its revenues.
In recent weeks the Palestinian Authority has been appealing to Arab states to fulfill their pledged donations, amidst what PA economic officials have called the ‘worst budget crisis’ in the West Bank in two decades.
The new agreement ensures a marked improvement in data sharing between Israel and the Palestinian Authority. In addition, the agreement stipulates the use of advance technology and joint monitoring to supervise trade, and the building of a pipeline to enable the safe transfer of fuel from Israel to the Palestinians.
Steinitz termed the agreements an important step to bolster economic ties between Israel and the PA. Fayyad said the agreements would strengthen the PA’s economic foundations and further economic ties between Israel and the PA.
The agreements will take effect on 1 January 2013.