Israel Withholds April Tax Revenues, Intensifying PA Economic Crisis
Reflecto News | Middle East | Economic & Political Affairs
RAMALLAH — Israel has refused to transfer tax revenues collected on behalf of the Palestinian Authority (PA) for April, with Finance Minister Bezalel Smotrich’s office deducting approximately 590 million shekels ($197.7 million) from a total of 740 million shekels ($248 million) to cover alleged debts, while the remainder remains frozen.
The monthly clearance revenues—taxes and customs duties Israel collects on goods destined for Palestinian markets under the Oslo Accords—constitute roughly 60 percent of the PA’s income . The latest withholding brings the total amount of PA funds held by Israel to an estimated $4.4 billion .
📊 April Deductions Breakdown
According to a statement from Smotrich’s office cited by multiple news outlets, the deductions were allocated as follows :
| Category | Amount (NIS) | Amount (USD) |
|---|---|---|
| Total collected | 740 million | ~$248 million |
| Deducted: Electric Corp., water, environmental bodies | 590 million | ~$197.7 million |
| Remaining balance | 150 million | ~$50.3 million |
| Status of remainder | Frozen (not transferred) | Frozen (not transferred) |
The deductions are intended to cover the PA’s “accumulated debts” to the Israel Electric Corporation, water utilities, and environmental bodies, according to the Finance Ministry statement . Additional deductions were reportedly made from funds the PA had allocated to transfer to what Israel terms “terror-related entities” .
The remaining balance has been frozen as part of what Smotrich’s office describes as a “policy led by the Minister over the past year, protesting the PA’s actions against Israel in international institutions (such as the Hague court) and its encouragement of terrorism” .
📉 One Year Without Transfers
The April withholding is not an isolated incident. According to PA Prime Minister Mohammad Mustafa, “In the past year, not a single shekel of tax revenues has been transferred to us” .
Speaking at a press conference marking the conclusion of local elections in PA areas, Mustafa stated:
“The occupation has been cutting our funds for years, but the intensity of the cuts has increased over the past 12 months. We are living without tax income in an attempt to destroy the institutions of the State of Palestine. All residents are suffering, particularly PA employees.”
Smotrich confirmed the policy, stating that the funds “have been frozen for about a year due to the minister’s policy not to transfer funds to the Palestinian Authority in light of its actions against the State of Israel in the international arena and its support for incitement to terrorism” .
💸 Impact on the Palestinian Authority
The financial stranglehold has pushed the PA to the brink of collapse. On April 19, the Palestinian Finance Ministry announced that, in light of what it described as Israel “stealing tax revenues” for the past year, all public sector employees would receive only NIS 2,000 ($672) for their January salaries—paid with significant delay .
Since late 2021, the PA has been unable to pay full salaries to public sector employees, with payments ranging between 50 percent and 80 percent of monthly wages . The current freeze represents a complete halt to salary payments for many employees.
The PA has also been unable to meet its obligations to the private sector, with debts to local banks accumulating .
🎯 Smotrich’s Position
Finance Minister Bezalel Smotrich, an adamant opponent of Palestinian statehood who has called for the PA to be dismantled , has been the driving force behind the withholding policy.
“We will not transfer funds that ultimately reach terrorists who harm Israeli civilians. Our policy is clear: every shekel intended to encourage terrorism or hostile activity will be offset and stopped. At the same time, we are acting responsibly to ensure that the funds are directed toward safeguarding the vital interests of the State of Israel.”
Smotrich added: “Whoever chooses to fight the State of Israel in the international arena and to support terrorism will bear the price” .
The deductions have escalated since November 2023, following the outbreak of the war in Gaza, when Israel began deducting sums the PA had allocated to Gaza (including salaries for former PA employees and services such as electricity and water). The PA said at the time that it would refuse to accept partial transfers .
🌍 International Response
The Trump administration has pressed Israel to release the funds, including during Prime Minister Benjamin Netanyahu’s December meeting with President Donald Trump in Florida . Despite U.S. pressure, Netanyahu has refrained from bringing the matter before the cabinet. In November, he shelved plans to prevent Smotrich from trying to collapse the Palestinian Authority, after the far-right minister threatened to resign and bring down the government .
The PA, for its part, has indicated that it will not accept partial transfers . Mustafa stated that the government is “working diligently to thwart the occupation’s plans aimed at bringing the Palestinian people to their knees” . The PA leadership is seeking to pressure Israel through international channels, including the International Criminal Court and UN institutions .
📋 Key Takeaways for Reflecto News Readers
| Aspect | Summary |
|---|---|
| April total collected | 740 million NIS (~$248 million) |
| Amount deducted | ~590 million NIS (~$197.7 million) |
| Deduction justification | Debts to Israeli electric, water, environmental bodies |
| Remaining amount | ~150 million NIS (~$50.3 million) — frozen |
| Freeze justification | PA actions in international forums, support for “terrorism” |
| Transfer status | No transfers for approximately one year |
| PA salary impact | Employees received only NIS 2,000 ($672) for January salaries |
| Total held by Israel | Estimated $4.4 billion |
| Next steps | PA pursuing international legal channels; U.S. pressing for release |
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