Official data from the Israeli Tax Authority reveals that in recent years Israel has not properly supervised the entry of goods into the Palestinian Authority. Palestinian importers submit false reports, and as a result, Israel transfers hundreds of millions of shekels to the Palestinians each year. The peak was in 2021 when the amount reached was about 1.5 billion NIS.
According to an agreement between Israel and the Palestinian Authority, since Palestine does not have its own ports, goods destined for them will be unloaded in Israeli ports and transported from there by trucks to the PA. Therefore, Israel is also the one that collects the import taxes for the Palestinian Authority on the goods. However, the rate of taxes transferred to the PA is determined by the Palestinian importer's statement.
According to data that was revealed by journalists from “Israel Hayom”, most of the containers are not transferred to the Palestinian Authority at all, but are instead unloaded and sold within Israel's territories, causing the Jewish State enormous economic damage.
The state as a result loses the import revenue that it transfers to the Palestinian Authority, even though some of the goods do not enter the authority at all and are sold within the borders of Israel by Palestinian businessmen who have licenses to operate within Israel. Second, the goods that are sold are not reported on and are without the Value Added Tax as well as income tax payments.
The "container scam" as called by some new outlets was already exposed in 2020 by the state auditor. "It is necessary to carry out close supervision so that the goods are transferred to the territories of the Palestinian Authority, since if they are not transferred to it and instead leak out and be sold in Israel, the loss to the state will double," the auditor stated at the time.
Israel Lost Billions on Import Taxes It Transferred to the PA for Goods that Never Arrived - @JewishPress - https://t.co/nB8TVBwqAN pic.twitter.com/3t9bhN1vA5
— JewishPress.com (@JewishPress) May 4, 2023
In 2019, 66% of the containers were not transferred to the territories of the Palestinian Authority, and Israel's loss was about 543 million NIS. In 2020, 70% of the goods were not transferred a loss that amounted to approximately 695 million NIS, and in 2021, 83% of the loads were not transferred a loss of no less than 1.5 billion NIS.
A tax enforcement official told reporters that the state is limited due to the "Paris Agreement", signed between Israel and the Palestinian Authority in 1994. According to the agreement, Israel must transfer the taxes according to the importer's declaration, and not according to the actual arrival of the cargo in the PA territories.
Finance Min Smotrich orders a continued halt of tax revenue from PA, redirects it to families of terror victims.
— Ora Levitt 🇮🇱 חיילת צה"ל 🇮🇱 עם ישראל חי (@IDFsoldiergirl) May 3, 2023
“The state of #Israel is stopping the financing of terror by the #Palestinian Authority, we won’t let this absurd situation continue,” he says.https://t.co/xcnqBkTvk9
In a statement that came after the “Container Scam” was exposed, the Tax Authority said: "The Tax Authority is working on the transfer of import funds to the Palestinian Authority in accordance with the provisions of the Paris Agreement. We operate ongoing supervision of the crossings between Israel and the Palestinian Authority, among other things for the purpose of eradicating criminal activity in which goods declared to be destined for the territories of the Palestinian Authority actually arrive at destinations within Israel. The Tax Authority operates in accordance with the measures available to it by law, including confiscation of financial deposits of importers in the event that the goods did not reach the territories of the Palestinian Authority."
