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"Lies, damn lies and statistics" - the PA version

Maurice Hirsch, Adv.  |

Announcing the Palestinian Authority's intention to begin international arbitration proceedings regarding the tax revenues Israel collects and transfers to the PA, the PA Minister of Finance Shukri Bishara chose to obfuscate reality presenting a financial picture that has little to do with real facts, but rather simply reinforces the PA narrative.

In the announcement, Bishara claimed that the payment for services Israel provides to the PA and an agreed handling fee are unrightfully "withheld" by Israel:

"The total amount of what Israel has withheld from the clearance revenues, which are the Palestinian taxes on imports from Israel and abroad collected by Israel on behalf of the Palestinian Authority (PA), has exceeded $3.5 billion in the last five years alone, of which $400 million was taken as 3% commission on the collection and over $3 billion for services, electricity, water, medical transfers and sanitation."

WAFA, English edition, Official PA news agency, Sept. 4, 2019

Comprehensive statistics obtained by Palestinian Media Watch from Israel's Ministry of Finance under the Freedom of Information Law, show that Bishara's claims are outrageous.

First, it should be noted that when Bishara refers to the amounts "Israel has withheld," he is, in reality, referring to the PA's payments for services provided by Israel to the Palestinians, such as "electricity, water, medical transfers, and sanitation." Distorting this simple fact - in order to create the impression that Israel arbitrarily deducted these sums - becomes an additional element of the PA's "Palestinian victimhood" narrative. Clearly, however, if Israel provides services to the PA, Israel is entitled to be paid for those services.

Secondly, as opposed to Bishara's claim that Israel has deducted $3 billion in the last five years for the above-mentioned services, the real figures tell a different story. As can be seen from the following chart, in reality, over the last five years, the cumulative amount paid from the tax revenues for services Israel has been provided to the PA is 7,508,910,102 shekels - the equivalent of only $2.1 billion.


When Bishara decries the "3% commission on the collection" of the taxes, he is, in reality, referring to the administrative fees incurred by Israel in return for collecting the taxes. The Palestine Liberation Organization (PLO) agreed to paying this fee in section 4 of the Supplement to the Protocol on Economic Relations between the State of Israel and the PLO, which was incorporated into the Israeli-Palestinian Interim Agreement on the West Bank and the Gaza Strip (commonly known as the Oslo Accords), which provides as follows:

"For the purposes of the implementation of the Protocol on Economic Relations, Israel will deduct 3% from each transfer to the Palestinian side of import taxes and other indirect taxes, in order to cover Israel's administrative costs in collecting these taxes and in handling matters related to them."

By failing to mention the context in which the fee is taken and that the taking of the fee by Israel was agreed to by the PLO, Bishara presents a distorted and false reality in which Israel acts arbitrarily to the detriment of the Palestinians.

Another outrageous claim made Bishara is that the original financial accord between Israel and the PLO, commonly known as the Paris Protocol, "includes the allowances for the families of Palestinians killed or imprisoned by Israel." In other words, Bishara is claiming that Israel specifically agreed to the PA using the tax revenues that Israel collects and transfers to the PA to incentivize and reward the terrorists attacking Israel.

While the PA has made this claim in other forums, it has never once pointed to the specific provision it is relying on. Mere logic suggests that Israel of course would never have agreed to facilitate or authorize PA payments to terrorists and murderers.

It is this PA policy of paying monthly salaries to terrorist prisoners and released prisoners, and allowances to wounded terrorists and the families of dead terrorists - the so-called "Martyrs" - commonly known as the PA's "Pay-for-Slay" policy, that stands at the base of the PA's current financial crisis.

In July 2018, Israel's parliament passed its Anti-"Pay for Slay" legislation to financially penalize the PA for its terror reward payments. According to the law, Israel's Minister of Defense must compile an annual report of the PA's payments to the terrorist prisoners, released terrorist prisoners, and the so-called "Martyrs" and wounded. Once approved by the Security Cabinet, the Israeli Government will deduct the amount the PA spent to incentivize and reward terrorists from the taxes Israel collects and transfers to the PA.

The first such report was submitted and approved in February this year. The report, which focused only on the PA payments to the terrorist prisoners and released prisoners, mirrored PMW's prior exposé which showed that the PA had admitted to spending 502 million shekels in 2018, paying the salaries of the terrorist prisoners and released prisoners.

Based on the report submitted, the Security Cabinet decided to deduct 502 million shekels from the 2019 PA tax revenues, as prescribed by the law, in 12 equal parts, totaling almost 42 million shekels/month. This sum was deducted from the tax income which, on average in 2018, was 670 million shekels.

In response, the PA decided to refuse to accept any of the tax revenues and plunge the entire PA into a self-inflicted financial crisis.

Just recently, the PA finally agreed to accept 2 billion shekels of the funds that had accrued as a result of their refusal to accept them. Explaining the move, PA Civil Affairs Minister Hussein Al-Sheikh, falsely claimed that the funds were received "after exhausting negotiations" and that the PA would be importing petroleum "without the "blu" tax retroactively for the past 7 months."

While Bishara can dictate a false narrative of "Palestinian victimhood" to WAFA, the official PA news agency, it is nothing more than what Mark Twain and others might have categorized as "lies, damn lies, and statistics," and PMW hopes that the information provided above will assist those interested in seeing the full - and true - picture.

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