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PA's first response to Israeli "anti-pay-for-slay" law was to transfer allowances to terrorists and their families

Headline: "The [PA] government prepares for lengthy dealings with the taxes, and the private sector mobilizes"

"As of now, there is not an exact date for the payment of the salaries and it is not clear what the [PA] Ministry of Finance will do regarding the rate (i.e., the percentage of the public employees’ salaries that will be paid). Matters are moving in the direction of implementation of the 2014 formula more or less, and it seems that the leadership and [PA] government, including the Ministry of Finance, are dealing with the crisis as an opportunity to correct the flaws in the relations that give Israel the power to completely control the tax money in terms of calculation, taxation, transfer, and deduction (referring to the Anti "Pay-for-Slay" Law to deduct terrorist salaries; see note below -Ed.)

And in order to emphasize the stable position regarding the allowances of the Martyrs (Shahids) and prisoners, the government's first step, in accordance with [PA] President Mahmoud Abbas’ orders, was to transfer the allowances of their families in full and meticulously, in defiance of the Israeli decision, which caused widespread calm among the citizens.

According to sources in the Ministry of Finance, [PA] Minister [of Finance] Shukri Bishara contacted his Israeli counterpart [Minister of Finance] Moshe Kahlon in an official letter three days ago [March 4, 2019], the gist of whose content was that the Israeli control of the tax revenues is no longer acceptable, and we will not accept it from now on, and specifically not just the deduction of the allowances of the Martyrs, prisoners, and wounded – which is unacceptable – but also the present deductions for the payment of services such as electricity, and its calculation, and the decision about it being made in a solely one-sided manner, and also the collection fee (3%) [parentheses in source] that reaches approximately 20 million shekels per month (sic., Israel does not take any transfer fee). The position in short: 'We want the taxes in full without any deductions, with any amount due to the Israeli service providers being transferred [to the Israelis] after their calculation and agreement on them between the two sides'; he also gave the Israeli side an extension of seven days to transfer the tax money in full without deductions…

In the latest statements by Minister of Finance Shukri Bishara, he considered the Israeli decision an opportunity to reorganize the economic and financial relation with Israel by saying: 'This is a blessing in disguise. The Israeli decision has set us on a path from which it is hard to return, and indeed there is a fee of 3% that Israel deducts, whose value reaches up to 20 million shekels a month, for the collection of the taxes that the Palestinian citizen pays. These are amounts that we must return to ourselves. We have additional demands to correct the relation with the Israelis, but there is a delay and there is no progress. The time has come to change this reality in different ways.'

Also, as part of this direction, [PA] Foreign Minister of Foreign Affairs [and Expatriates] Riyad Al-Malki revealed diplomatic and legal efforts being made to pressure Israel in the international forums to stop playing with the Palestinian revenues, and among these the selection of the relevant international courts as a prelude to submitting a lawsuit against Israel to obligate it [to comply with] international law and the bilateral agreements."

Israel's Anti "Pay-for-Slay" Law - Israeli law stating that the PA payments to terrorists and the families of dead terrorists is a financial incentive to terror. The law instructs the state to deduct and freeze the amount of money the PA pays in salaries to imprisoned terrorists and families of "Martyrs" from the tax money Israel collects for the PA. Should the PA stop these payments for a full year, the Israeli government would have the option of giving all or part of the frozen money to the PA. The law was enacted by the Israeli Parliament on July 2, 2018, and its first implementation was approved by Israel's Security Cabinet on Feb. 17, 2019, when it decided to withhold 502,697,000 Israeli shekels (approximately $138 million) from the PA. In response, the PA announced it would not accept any of the tax money collected by Israel unless it also included the frozen amount. During the initial parliamentary vote in 2018, the law's sponsor Avi Dichter said: “The Foreign Affairs and Defense Committee received much help in its deliberations... from Palestinian Media Watch who provided us with authentic data that enabled productive and professional deliberations, nuances that are very difficult to achieve without precise data.” [Israeli Parliament website, July 2, 2018]