Israel Releases $116 Million in Withheld Tax Revenues to Palestinian Authority Amidst Ongoing Dispute over Gaza Funds

Israel has released 435 million shekels ($116 million) in withheld tax revenues to the Palestinian Authority, marking the first such transfer since April. Under a long-standing arrangement between the two sides, Israel collects taxes on goods passing through it to the West Bank on behalf of the Palestinian Authority and transfers the revenues to Ramallah.

Israeli Finance Minister Bezalel Smotrich had been withholding funds for administrative spending in Gaza since the war began on October 7. In addition, Israel was deducting money for electricity, water, and the cost of treating Palestinians in Israeli hospitals. However, Smotrich opposed sending the money to the Palestinian Authority as he accused them of supporting the attack on October 7. He also claimed that these deductions reduced the amount transferred to Ramallah significantly less than what was collected monthly.

Last week, Smotrich agreed to transfer the funds this month after receiving concessions from the Israeli government on sanctions against Palestinian Authority officials and legalizing five Israeli settlements in the West Bank. The Palestinian Authority credited its contacts and international pressure for leading Israel to transfer these funds and stated that they would continue their efforts to recover more than six billion shekels of withheld funds needed to meet their financial obligations.