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Israel’s government poised to deduct ‘terror salaries’ from PA tax money

Law passed in summer of 2018 takes effect, requiring Israeli government to deduct money paid to terrorists and their families from tax funds collected on behalf of the Palestinian Authority • Netanyahu says he will enact deduction, though worries it will destabilize P.A.

Israeli Prime Minister Benjamin Netanyahu leads the weekly Sunday cabinet meeting in Jerusalem on Dec. 9, 2018. Credit: Marc Israel Sellem/POOL.
Israeli Prime Minister Benjamin Netanyahu leads the weekly Sunday cabinet meeting in Jerusalem on Dec. 9, 2018. Credit: Marc Israel Sellem/POOL.

The Diplomatic-Security Cabinet is expected within two weeks to approve a major cut to the tax revenues that Israel collects on behalf of the Palestinian Authority, with the amount the P.A. pays to terrorists and their families to be deducted from the money Israel hands over to the P.A.

The reduction will be enacted under a law passed this past summer by Knesset members Elazar Stern (Yesh Atid) and Avi Dichter (Likud), which requires the Defense Ministry to provide the cabinet with data on the amount the P.A. pays terrorists and their families. The Finance Ministry will then withhold that amount from the tax funds.

For some weeks, the Defense Ministry has been assiduously collecting figures to determine the exact amount that the P.A. pays out in “terror salaries.” According to the mechanism stipulated by the law, after a report on the salaries is presented, the Finance Ministry will carry out the deduction.

Israeli Prime Minister Benjamin Netanyahu has said in closed-door talks that the deduction will go ahead, although he expressed concern that the reduced tax funds would hurt the stability of the P.A. He also said he would look for a way to carry out the demands of the law while ensuring that the P.A. remains stable.

Dichter, who serves as chairman of the Knesset Foreign Affairs and Defense Committee, said in response to recent reports on the amount of the P.A. terror salaries that “every shekel the Palestinian Authority pays to terrorists will be deducted [from the tax funds.] That is how we create deterrence against terrorism.”

Israel Hayom recently reported that in 2018, the P.A. paid out 502 million shekels ($138 million) to living terrorists. A probe by the Palestinian Media Watch group showed that at least 230 million shekels ($63 million) had been paid to terrorists currently in prison.

The government ministries involved in the deduction have not yet specified the amount to be withheld from the tax revenues Israel will hand over to the Palestinian Authority.

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