Palestinians criticise Israeli decision to withhold tax

Israel is withholding $127 million (€106 million) in tax revenue it collects for the Palestinian Authority in response to its move last week to join the International Criminal Court, further escalating tensions with a step that could have repercussions for both sides.

Saeb Erekat, the chief Palestinian negotiator, said that the Israeli move could lead to the disintegration of the 20-year-old authority because it would be unable to pay government workers or provide public services. He promised to retaliate by expediting the petitions to join the court and other international agencies and said Israel “will be held accountable for everything.”

"He will be solely responsible for the Palestinians under occupation in the West Bank, Gaza and East Jerusalem," Mr Erekat said of Israeli prime minister Benjamin Netanyahu. "It's our tax money. It's our people's money." Mr Erekat also accused Israel of "destroying" the Palestinian Authority.

Mr Netanyahu’s office declined to comment on the decision to withhold the monthly transfer, which was made at a ministerial meeting and confirmed by Israeli and Palestinian officials, who requested anonymity to discuss the issue.

Mr Erekat said the tax revenue provided the bulk of the authority's $160 million (€133 million) monthly operating budget. It is the first in an expected series of punitive measures in response to a push by the Palestinians to prosecute Israeli officials on war crime charges over their dealings with militants in the Gaza Strip last summer and for continuing settlement construction in the West Bank and East Jerusalem.

"It's not the last step," Gilad Erdan, a minister from Mr Netanyahu's Likud Party, said on Israeli television. "Other steps are being considered." Mr Erdan acknowledged that freezing the tax transfer "is not the solution" to the conflict but said that because the Palestinians are "taking unilateral steps" like joining the court, "Our task is to protect ourselves, our state, and Israel Defence Forces officers and soldiers."

Israel has withheld taxes at least six times before, including in April after the Palestinians joined 15 international treaties and conventions as US-brokered peace talks collapsed, and in 2012 after the UN General Assembly upgraded their status to that of a nonmember observer state. The transfers were usually renewed within weeks.

However, the situation has deteriorated significantly over the last year, with the abductions and murders of Israeli and Palestinian teenagers, followed by the 50-day war that killed nearly 2,200 people in Gaza and more than 70 on the Israeli side. There has also been a spate of deadly terror attacks and clashes in the latter half of the year.

Failed negotiations

Frustrated after decades of failed bilateral negotiations, the Palestinians have adopted a global strategy. They have successfully lobbied European parliaments to recognise them as a state, joined more than 30 international conventions, and pressed for a UN Security Council resolution setting a 2017 deadline for ending Israel's occupation.

The UN Security Council resolution failed last week, but the Palestinians plan to present it again this month, after the council’s membership has shifted in their favour. Joining the International Criminal Court was long considered to be one of the Palestinians’ main weapons, and there are a number of steps they can take as a result.

Giora Eiland, a former Israeli national security officer, called withholding taxes "counter-productive".

“If you cut the payments to the Palestinian Authority, then who is not going to be paid? Some of them are the Palestinian policemen. Do we want them to be frustrated, or do we want them to continue to cooperate with us?” Mr Eiland said.

New York Times