Palestine Warns Of Treasury Crisis Amid Israel's Withholding Of Tax Revenues

RAMALLAH, Jan 4 (Bernama-Xinhua) -- The Palestinian government warned on Sunday of a deepening crisis facing its public treasury as Israel continues to withhold Palestinian tax revenues, reported Xinhua.

Mohammed Abu al-Rub, director of the Palestinian Government Communication Centre, said that the total amount withheld by Israel has reached a record high of some 14 billion shekels (US$4.4 billion), casting "a heavy shadow on the government's ability to meet its financial obligations to employees and vital sectors."

The Palestinian government needs at least 1.3 billion shekels (US$407 million) each month to cover salaries and essential operating expenses, an amount that exceeds available resources under the current financial constraints, Abu al-Rub said.

He said the Palestinian side remains in contact with international parties to secure a financial safety net, but the support received so far "remains partial and does not meet the minimum actual needs."

Under existing arrangements, Israel collects customs duties and value-added taxes on goods imported into Palestinian territories and transfers the funds to the Palestinian Authority (PA) monthly.

Since November 2021, the PA has been paying only partial salaries, ranging from 50-90 per cent, to public sector employees due to severe financial crises.

Security tensions in the West Bank have intensified since the start of the Israel-Hamas conflict in October 2023, further deepening the PA's financial crisis and limiting its ability to pay salaries and deliver essential public services. 

--BERNAMA-XINHUA