Palestinian taxes: PA’s transferred via Norway, Gaza’s frozen

Israeli media reports that the cabinet will transfer tax funds to the Palestinian Authority via Norway, despite the opposition of Police Minister Itamar Ben-Gvir.

he Israeli War Cabinet approved today, Sunday, a plan to “transfer [Palestenian] tax revenues to the Palestinian Authority” via Norway while deducting the amount dedicated to Gaza, and freezing it in a bank in Norway, Israeli media reports. 

Earlier today, the cabinet held an “important” session, as described by Israeli media, to discuss the prospect of transferring clearance funds, i.e. Palestinian taxes collected by the occupation, to the Palestinian Authority.

The Israeli Broadcasting Corporation reported that the cabinet agreed to transfer these funds to the Palestinian Authority via a third country, namely Norway, despite the exclusive opposition of Police Minister Itamar Ben-Gvir.

The Israel Broadcasting Corporation noted that this transfer will happen under the condition that none of these funds will reach the Gaza Strip, and if this guarantee is violated by the Palestinian Authority the Israeli Ministry of Finance will freeze all financial transfers to Ramallah.

The Corporation also clarified that the Israeli Prime Minister, Benjamin Netanyahu, discussed with the Minister of Finance, Bezalel Smotrich, and the Minister of Strategic Affairs, Ron Dermer, the prospect of “transferring clearance funds to Norway, on the condition of ensuring that they are not transferred to the Gaza Strip.”

Additionally, the Israeli council discussed deducting the salaries of employees of the Palestinian Authority in Gaza, under the pretext of the war on the sector, from the clearance funds.

The ministers of the cabinet were informed that transferring funds allocated to the Gaza Strip to a third country is based on an “American request,” in order for the Palestinian Authority to accept the remaining funds, and that this matter is “of great importance” to the US administration.

In doing so “Israel” persists with its genocidal siege against Gaza, by holding up the Gazans’ own money which they had garnered through tax collection.

Biden admin v Netanyahu cabinet tug of war 

After the onset of the war in Gaza, the occupation’s far-right Finance Minister, Bezalel Smotrich, decided to suspend the transfer of all tax revenue funds.

This decision was later mitigated by the collective Israeli Occupation Cabinet. It was decided that tax revenues would be transferred, except the portions meant for Gaza, which would be withheld by the occupation as it tries to choke the enclave.

The Palestinian Authority, however, had rejected this proposal of a partial transfer of tax revenues, refusing to accept partial funds and insisting on the release of all Palestinian tax revenues. 

Tax revenues are the main source of income for the Palestinian Authority, which is already struggling with financial complications to pay the salaries of its security forces. 

Norway as intermediary

To address Israeli concerns about Gaza revenues reaching Hamas, Biden proposed transferring the withheld tax revenues to Norway for safekeeping until a satisfactory arrangement is reached, US officials reported. 

The PA approved the US proposal and accepted taking partial revenues if the withheld Gaza revenues were transferred to Norway for safekeeping. To exacerbate the tensions, Finance Minister Bezalel Smotrich has expressed opposition to the release of any of the funds, even indirectly, and has threatened to resign over the issue, which could put the prime minister’s coalition government at risk.

“As long as I am finance minister, Israel will not transfer tax money to the Palestinian Authority,” Finance Minister Bezalel Smotrich said at the time.

According to Axios sources, Biden told Netanyahu that he must stand up to the political pressure from the hardliners in his government, similar to how Biden is standing up to the political pressure from Congress.

After failing to agree over the call, Biden told Netanyahu he expected him to solve this issue, saying “This conversation is over” and then hung up.