Palestinian tax revenues entrench divide between US, 'Israel': Axios

By Al Mayadeen English
Source: Axios
29 Dec 2023 15:55
1 Shares

Biden seems to have been angered by Netanyahu after discussing the topic of withheld Palestinian tax revenues.

President Joe Biden meets with Occupation Prime Minister Benjamin Netanyahu in New York, Wednesday, Sept. 20, 2023. (AP)

Axios reported, citing informed US officials, that President Joe Biden held a difficult discussion with Occupation Prime Minister Benjamin Netanyahu regarding "Israel's" decision to withhold a portion of the tax revenue collected by the occupation from Palestinians for the Palestinian Authority.

The exchange was described as one of the most "frustrating" conversations between Biden and Netanyahu since the onset of the aggression against Gaza, a US official told Axios.

Netanyahu, Smotrich, US, and the PA

After the onset of the war in Gaza, the occupation's far-right Finance Minister, Bezalel Smotrich, decided to suspend the transfer of all tax revenue funds.

This decision was later mitigated by the collective Israeli Occupation Government. It was decided that tax revenues would be transferred, except the portions meant for Gaza, which will be withheld by the occupation as it tries to choke the enclave in its ongoing genocidal war.

The Palestinian Authority, however, rejected this proposal of a partial transfer of tax revenues, refusing to accept partial funds and insisting on the release of all Palestinian tax revenues.

Tax revenues are the main source of income for the Palestinian Authorities, which are already struggling with financial complications to pay the salaries of their security forces.

The PA's refusal to accept a partial transfer of tax revenues puts it and its security apparatus, which polices the West Bank at risk of dissolution, and thus the US had to intervene to prevent the potential collapse of the PA, which could lead to a violent escalation in the West Bank as a result of it not being able to pay its security forces their salaries, the report points out.

Norway as intermediary

To address Israeli concerns about Gaza revenues reaching Hamas, Biden proposed transferring the withheld tax revenues to Norway for safekeeping until a satisfactory arrangement is reached, US officials reported.

The PA approved the US proposal and accepted taking partial revenues if the withheld Gaza revenues were transferred to Norway for safekeeping. To exacerbate the tensions, Finance Minister Bezalel Smotrich has expressed opposition to the release of any of the funds, even indirectly, and has threatened to resign over the issue, which could put the prime minister's coalition government at risk.

"As long as I am finance minister, Israel will not transfer tax money to the Palestinian Authority," Finance Minister Bezalel Smotrich said.

The Frustrating Call

Netanyahu, even though having entertained the option of transferring tax revenues to Norway himself a few weeks back, didn't accept Biden's proposal saying that he didn't think this was a good idea anymore.

According to Axios sources, Biden told Netanyahu that he must stand up to the political pressure from the hardliners in his government, similar to how Biden is standing up to the political pressure from Congress.

After failing to agree over the call, Biden told Netanyahu he expects him to solve this issue, saying "this conversation is over" and then hung up.

"The feeling was that the president is going out on a limb for Bibi every day and when Bibi needs to give something back and take some political risk he is unwilling to do it," one US official said.