Prime Minister Benjamin Netanyahu and Finance Minister Moshe Kahlon have reportedly discussed emergency plans, should the Palestinian Authority’s financial system collapse over its refusal to accept tax dividends collected by Israel, according to television reports Sunday.
The two met Sunday to discuss what plans to put in place and what possible moves would keep the Palestinians solvent, amid fears that financial woes could cripple the Palestinian economy and destabilize the West Bank, according to the reports.
Israel announced in February that it would withhold $138 million in monthly payments to the PA — to offset the PA’s payments to Palestinians jailed by Israel for terrorism and violence, and to the families of dead terrorists.
The Palestinians have protested the law, refusing to receive any of the taxes Israel gathers for them on a monthly basis, as long as the Jewish state does not transfer them their full amount.
The taxes Israel collects and transfers to the PA make up hundreds of millions of shekels, more than half of its monthly budget.
According to the Kan public broadcaster, Israel recently tried to transfer $182 million to the PA, but the transaction was rejected.
A senior Palestinian Authority official reportedly warned that Hamas means to exploit the economic situation in the West Bank and pay off PA officers and security forces to take control of the territory.
The World Bank warned last week of an economic crisis, if the issue is not resolved.
Israel, which collects taxes on behalf of the PA, says the PA payments to terrorists and their families encourage further violence. The PA claims they are a form of welfare to families who have lost their main breadwinner.
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