Israel's Decision To Withhold Tax Money From Palestinians May Impact Security

West Bank's 165,000 Civil Servants Go Unpaid

Unpaid: The decision to withhold revenue from the P.A. is impacting the Palestinian economy as well as Israel’s security.
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Unpaid: The decision to withhold revenue from the P.A. is impacting the Palestinian economy as well as Israel’s security.

By Ben Lynfield

Published January 26, 2013, issue of February 01, 2013.
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In August 2011, a report by the Knesset’s Foreign Affairs and Defense Committee hailed the Palestinian Authority’s “comprehensive security coordination” with Israel in thwarting terrorist attacks — a judgment echoed in May 2012 by the chief of the Shin Bet, Israel’s domestic intelligence agency. “The security coordination with the P.A. is good,” Yoram Cohen told the same committee then.

But Cohen warned the lawmakers that Palestinian security cooperation in the Israeli-occupied West Bank was “highly affected by the atmosphere on the street, public opinion and state of the economy.”

Now, even as post-election negotiations over the next government consume the country, Prime Minister Benjamin Netanyahu’s decision to withhold tax revenues that Israel collects for the P.A. is directly undermining the livelihoods of the security men coordinating with Israel’s own security forces.

The P.A.’s estimated 165,000 employees, including its security forces, are not receiving their monthly paychecks, because of the impact on government coffers of Israel’s tax withholdings and of reductions in recent years of international aid. And the same dual hits have sent the Palestinian economy into just the kind of downward spiral of which Cohen warned.

In the heavily government-dependent P.A. economy, these employees and the money they spend form the economic backbone of the occupied territory.

In an appliance store at the southern entrance to Ramallah, shop manager Hazem Shuleh, 24, shows a visitor bounced checks that P.A. employees have been giving him, including one from an intelligence officer who was unable to cover his installment payments for a refrigerator because he has not received his full salary since November.

“I called the officer and told him I need the money, that I need to pay the supplier,” Shuleh told the Forward. “He said: ‘I don’t have it. Be patient.’ I end up eating air.’’

Another returned check belonged to a P.A. policeman, Shuleh said.

Israeli officials are declining to specify when seized tax revenues vital for the Palestinian economy will once again be transferred to the P.A.


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