The Security Cabinet voted Sunday to deduct NIS 600 million from tax and tariffs collected for the Palestinians Authority, as it is legally required to do annually, so long as the PA pays terrorists who attacked Israelis.The amount deducted from tax collected is in a report by the Defense Ministry’s National Bureau for Counter-Terror Financing. It gives the sum of PA funds indirectly supporting terrorism, via the payments that go to Palestinians in Israeli prisons for committing terrorist attacks, or the families of Palestinians killed while attacking Israelis.
Tax deductions
The deduction will be made over the course of the coming 12 months.
The PA’s policy of paying terrorists or their family has been nicknamed “pay for slay,” while the Palestinians call it a “martyrs’ fund.”
Palestinians with longer prison sentences receive higher monthly stipends, such that the more Israelis they kill or maim, the more money the PA pays them.
Health Minister Nitzan Horowitz abstained from Sunday’s Security Cabinet vote, but expressed opposition to the move in the closed-door meeting, saying that cooperation with the PA on security and civil matters is important, and the deduction makes it more difficult.
Horowitz also pointed out that a large part of the deductions in recent years were paid back to the PA in the form of loans.
Transportation Minister Merav Michaeli suggested that Israel negotiate with the PA so it stops paying terrorists, which Alternate Prime Minister Naftali Bennett opposed.
The Finance Ministry deducts the amount the PA pays terrorists and their families each year in accordance with the Pay for Slay Law passed in 2018, which requires the Defense Ministry to provide the Security Cabinet with the requisite information. The cabinet does not, however, have the discretion not to withhold the funds, according to the law.
Israel collects VAT and tariffs on imports to the PA, all of which go through Israeli checkpoints. This arrangement was part of an annex to the Oslo Accords and provides the PA with its largest source of income. Israel also collects income tax and health insurance funds for Palestinians working for Israelis.
Jerusalem Center for Public Affairs senior researcher Brig.-Gen. (res.) Yossi Kuperwasser said that PA President Mahmoud Abbas “has no reason to worry.”
Defense Minister Benny Gantz “will find another arrangement,” Kuperwasser said, just as the Biden administration circumvented the Taylor Force Act, which stops US funding for the PA as long as “pay for slay” remains in place, by donating to UNRWA and Palestinian hospitals.
“Under the empty slogan of strengthening the PA, we allow the Palestinians to take out loans to deduct the deduction and funds the projects that are truly important to them, through which they perpetuate the violent struggle against Zionism,” Kuperwasser said.