Israeli Knesset Expands Authority to Withhold Palestinian Tax Revenues

Israel's Knesset has passed legislation expanding the government's authority to withhold tax revenues that Israel collects on behalf of the Palestinian Authority, according to reporting circulated by the Quds News Network. The law widens the legal grounds on which Israeli officials can freeze or deduct portions of the so-called clearance funds before transferring them to Ramallah.

Under the 1994 Paris Protocol, Israel collects customs duties, value-added tax and other levies on goods entering Palestinian territory and is obliged to remit those funds monthly to the Palestinian Authority. The clearance revenues are the single largest source of income for the PA, financing salaries for tens of thousands of public-sector employees across the occupied West Bank. In recent years Israel has repeatedly deducted sums it links to prisoner payments and to transfers destined for Gaza, leaving the Authority in a deepening fiscal crisis.

By broadening the conditions for withholding, the new measure tightens Israel's leverage over an Authority already struggling to pay wages in full. Palestinian officials have long described the deductions as collective economic punishment and a violation of the signed protocols governing the transfers.

The Knesset vote adds a further point of friction at a moment when Gulf states, including Qatar, have pressed for measures to shore up the Palestinian economy rather than see it pushed toward collapse.