Israel to reinstate monthly transfer of tax revenues to PA

PanARMENIAN.Net - Israeli Prime Minister Benjamin Netanyahu and his security cabinet decided to reinstate the monthly transfer of tax revenues to the Palestinian Authority on Monday, March 25, according to a Prime Minister's Office spokesman.

The move came just days after U.S. President Barack Obama visited Israel and the PA, and U.S. Secretary of State John Kerry met with Netanyahu and PA President Mahmoud Abbas to discuss efforts to renew the peace process, The Jerusalem Post reports.

Interim peace deals task Israel with collecting taxes and customs duties on the Palestinian Authority's behalf on goods imported into the Palestinian territories. Israel has previously frozen payments to the Palestinian government during times of heightened security and diplomatic tensions, provoking strong international criticism.

Netanyahu withheld the transfer of tax revenues collected for the PA in the aftermath of the Palestinian statehood upgrade at the UN in November.

Since, Israel has evaluated the transfer of the tax revenues to the PA on a month-by-month basis. Monday's directive appeared to normalize the tax transfers, cancelling the monthly reviews.

The aid-dependent Palestinian Authority has been in a financial crisis fueled by a drop in assistance from Western and wealthy Gulf backers, renewed tensions with Israel and a need to meet an expanding public sector payroll.

The International Monetary Fund warned earlier this month that the Palestinian Authority's fiscal situation was "increasingly precarious."

The IMF called for urgent action to help it close a gaping budget deficit and to stabilize the economy.

The United States confirmed over the weekend that it was releasing nearly $500 million in aid which had been frozen to the PA.

However, a PA official consequently warned that the financial crisis in the West Bank was not over despite the U.S. aid.

"Only $200 million of the $480 million from the United States will go to the Treasury, and the rest will be go to USAID-funded projects," the Bethlehem-based Ma'an News Agency quoted PA Labor Minister Ahmad Majdalani as saying on Saturday.

He added that of the $1.3 billion in aid pledged to the PA from various donor countries in 2012, only some $800 million had actually been transferred.