Israel recently made a significant move by reducing the tax on fuel it collects from the Palestinian Authority. This tax, which had remained at 3% since the signing of the economic agreements between Israel and the Palestinians in 1994 as part of the Oslo Accords, has now been lowered to 1.5%. This decision, which was announced by the coordinator of Israeli government operations in the West Bank and Gaza Strip, carries significant implications.
One immediate consequence of this tax reduction is a substantial cost-saving for the Palestinian Authority. It is estimated to result in savings of 80 million NIS per year, providing much-needed relief to the Palestinian Authority's budget. This measure reflects a willingness on Israel's part to support economic stability in the Palestinian territories.
בשקט בשקט, מתחת לרדאר, ממשלת ישראל פותחת את הסכמי אוסלו כדי להטיב עם הרש"פ. הנה כמה דוגמאות:
— Maurice Hirsch, Adv. 🇮🇱 עו''ד מוריס הירש (@MauriceHirsch4) September 28, 2023
בימים האחרונים התפאר מתפ"ש על השפעת הצעדים שבהם נקטו כדי להגדיל את הכנסות הרש"פ. בין היתר, התפאר מתפ"ש בהפחתה של דמי הטיפול בגין גביית המיסים על דקלים שמיובאים לרש"פ, מ- 3% ל- 1.5%. https://t.co/So5UNpiikL pic.twitter.com/1aMnkfGLhA
Moreover, it's important to note that Israel has been taking additional steps to support the Palestinian Authority's economy in 2023. These efforts include increased tax payments to the Palestinian Authority, which now average 730 million shekels per month, compared to around half a million three years ago. However, there have been concerns about the accuracy of these reports, as some goods intended for the Palestinian Authority end up being sold in Israel instead.
Furthermore, Israel has also increased funds transferred to the Palestinian Authority based on calculations and greater transparency in VAT payments. In total, these initiatives contribute approximately 350 million NIS to the Palestinian Authority's budget, underscoring Israel's commitment to bolstering the economic well-being of the Palestinian territories.
The decision to reduce the fuel tax for the Palestinian Authority was made several months ago, with Prime Minister Netanyahu leading the charge. Finance Minister Bezalel Smotrich, who oversees the Tax Authority and the Civil Administration in Israel, approved this decision, emphasizing Netanyahu's commitment to the American government. This move aligns with the Biden administration's call to improve the economic situation in the Palestinian Authority, which is believed to be on the brink of economic collapse.
However, it's worth noting that Israel's willingness to cooperate with this policy has drawn criticism in the American Congress. Some argue that while Israel is making concessions, the Palestinian Authority continues to allocate funds to pay the salaries of incarcerated terrorists, a contentious issue that has not gone unnoticed.
Congress examines paths to end Palestinian Authority’s ‘pay for slay’- start w/abolishing UNRWA, to which US just announced increasing their contribution by another $73 million, & closer scrutiny of @USPalAffairs who are trying to circumvent #TaylorForce https://t.co/bx2Zf0RqWe
— AdinaZ 🇺🇸🇮🇱🤌🏼 🪬⚖️ (@lackboys3) September 28, 2023
Attorney Maurice Hirsch, a researcher at the Jerusalem Center, has raised concerns about the Israeli government's actions. "Behind the scenes, the Israeli government is quietly revisiting the Oslo Accords to benefit the Palestinian Authority. The handling fees for fuel were originally established and approved within the financial annex of the interim agreement. The decision to reduce these fees raises questions about whether this action constitutes a breach of the accords or, at the very least, an implicit reopening of them. Were there deliberations on this matter within the government? Was there any discussion in the Knesset regarding these changes? And when does the government plan to communicate to the public that the Oslo Accords are being reconsidered for negotiations?"
