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Is Israel’s tax grab a prelude to further hollowing out the PA?

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Israel’s decision to withhold part of the taxes it collects on behalf of the Palestinian Authority and plunge it deeper into crisis starkly illustrates the hypocrisies and deceptions at the core of the two governments’ relationship.

Under the terms of what are now the quarter century-old Oslo accords, Israel is responsible for collecting about $200 million each month in taxes, which it is supposed to pass on to the PA, the Palestinian government-in-waiting in the West Bank.

The money belongs to the Palestinians but Israel has temporarily withheld it on several occasions in the past as a stick with which to beat the Palestinian leadership into line.

On this occasion, however, the stakes are far higher.

Last week Israeli Prime Minister Benjamin Netanyahu belatedly implemented a law passed last summer that requires his officials to retain part of the taxes owed to the Palestinians – those that the PA transfers to political prisoners’ families as a monthly stipend.

It echoes the Taylor Force Act, a law passed by the US Congress in 2016, that denies American economic aid to the PA until it stops sending those same stipends to 35,000 families of prisoners and those killed and maimed by the Israeli army.

The PA has tried to avert that threat by channelling the payments through a separate body, the Palestine Liberation Organisation.

Israel and Washington regard the prisoners simply as terrorists. But most Palestinians view them as heroes, those who have paid the highest price in the struggle for national liberation.

The Palestinian public no more believes the families should be abandoned for their sacrifices than Irish republicans turned their backs on those who fought British rule or black South Africans forsook those who battled apartheid.

Palestinian president Mahmoud Abbas called Israel’s actions “robbery” and said he would rather cut funding for health and education than for the prisoners and their families. “They are the most respected and appreciated part of the Palestinian people,” he declared.

Then he played his ace card. He said he would refuse all tax money from Israel until the full sum was reinstated.

That risks plunging the PA into financial meltdown and – most importantly for Israel – might ultimately lead to the disbanding of the Palestinian security services. Their job has long been to act as a security contractor, keeping order on Israel’s behalf in the West Bank.

The security forces hoovered up a massive 20 per cent of the PA’s $5.8 billion state budget last year.

The PA is already reeling from a series of hammer blows to the Palestinian economy. They include Donald Trump’s decision to cut all funding to UNRWA, the refugee agency for Palestinians, and to hospitals in Israeli-occupied East Jerusalem.

In addition, Abbas reportedly declined $60m in annual US aid for his security services last month for fear of exposing the PA to legal action. A new congressional measure makes aid recipients like the PA subject to American anti-terrorism laws.

But the current stand-off between Netanyahu and Abbas lays bare the duplicity of the situation for all to see.

The PA leader may say the prisoners are the most cherished Palestinian constituency but he also describes his security services’ co-ordination with Israel as “sacred”.

The security services’ role is to assist the Israeli army in foiling Palestinian attacks and in arresting the very Palestinians he extols. Abbas cannot realistically hold true to both positions at the same time.

Netanyahu, on the other hand, has nothing to gain from harming the Palestinian security services, which the Israeli army relies on.

The decision to withhold taxes was taken chiefly to boost his popularity as rival right-wing parties compete for who appears the most hawkish before April’s general election.

Paradoxically, in withholding the PA’s tax money, Netanyahu is punishing Abbas, his supposed peace partner, while showing a preference for Hamas, Abbas’s arch rival in Gaza.

Although Israel categorises Hamas as a terror organisation, Netanyahu has been allowing extra funds into Gaza from Qatar to alleviate the enclave’s dire conditions.

Further, there is something richly ironic about Netanyahu rebuking the PA for rewarding Palestinian “terrorists” in the same week he negotiated a deal to assist bringing Otzma Yehudit, or Jewish Power party, into the Israeli parliament.

The party is Israel’s version of the Ku Klux Klan, disciples of the late rabbi Meir Kahane, whose virulently anti-Arab Kach party was outlawed 25 years ago as a terror organisation.

So appalling is the prospect of this unholy alliance that even pro-Israel lobbies like the American Israel Public Affairs Committee (AIPAC) and the American Jewish Committee felt compelled to issue statements condemning Jewish Power as “racist and reprehensible”.

Netanyahu believes the extra votes Jewish Power will attract to the right in the election will ensure he has the support necessary to build a coalition that can keep him in power.

But there is another glaring flaw in Netanyahu’s tax grab.

If Abbas’s coffers run low, he will simply send even less money to Gaza, which is already being choked by Israel’s lengthy blockade.

That would intensify the unrest in Gaza, which could lead to rocket attacks into Israel and even larger mass protests by Palestinians at the perimeter fence encaging them.

At the same time, if things remain unresolved, an already fragile PA will move closer to collapse and Hamas might then be poised to fill the void left in the West Bank.

Loss of power for Abbas, combined with loss of a security contractor for Netanyahu, appear to make this confrontation mutually self-destructive – unless Netanyahu and the right have another card up their sleeve.

Hani Al Masri, a Palestinian policy analyst, has wondered whether Netanyahu is setting the stage for US President Donald Trump to introduce his long-awaited “peace deal” after the election.

Much of Netanyahu’s coalition is keen to annex Palestinian areas outside the main West Bank cities, destroying any hope of a Palestinian state ever emerging. Trump might be amenable.

In this scenario, argues Al Masri, Israel would aim to “end what remains of the PA’s political role, preserving only its administrative and security role”. It would be reduced to bin collections and law enforcement.

Should the PA reject the process of being hollowed out, Israel and the US would then look for an alternative, such as rule by local warlords in each Palestinian city and expanded powers for Israeli military rulers in the West Bank.

The denial of taxes to the PA may not yet presage its demise. But it points to a future in which Palestinian self-rule is likely to become an ever-more distant prospect.

A version of this article first appeared in the National, Abu Dhabi.

Jonathan Cook

Jonathan Cook won the Martha Gellhorn Special Prize for Journalism. His latest books are “Israel and the Clash of Civilisations: Iraq, Iran and the Plan to Remake the Middle East” (Pluto Press) and “Disappearing Palestine: Israel’s Experiments in Human Despair” (Zed Books). His new website is

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8 Responses

  1. JLewisDickerson on February 25, 2019, 12:54 pm

    RE: “Hani Al Masri, a Palestinian policy analyst, has wondered whether Netanyahu is setting the stage for US President Donald Trump to introduce his long-awaited ‘peace deal’ after the election. Much of Netanyahu’s coalition is keen to annex Palestinian areas outside the main West Bank cities, destroying any hope of a Palestinian state ever emerging. Trump might be amenable.” ~ J Cook

    MY COMMENT: This might be the reason Netanyahu seems so determined to ensure that he can form a far-right coalition (as opposed to a center-right coalition) after the upcoming elections.

  2. Kay24 on February 26, 2019, 12:10 am

    The zionist nation never fails to disappoint….they are brilliant at coming out with so many sadistic tactics that show their cruelty, and their now well known inhumane treatment, of those they wield their power, and weapons over.

    The world waits anxiously as the great Middle East Peace Maker (who incidentally gave Jerusalem to his favorite people) to finally do what all real diplomats and leaders, with experience, failed to achieve – peace, with the Palestinians being treated fairly, and given their rights, freedom, and what has been stolen from them.

    “Kushner: Economy and ‘redrawing of borders’ the focal points of Trump peace plan
    President’s son-in-law says proposal will address all final status issues, call for single Palestinian leadership for West Bank, Gaza, and have ‘broad economic impact’ for region.

    Kusher said last week that details of the US plan would be released after Israeli elections on April 9.

    While Prime Minister Benjamin Netanyahu has said he is “looking forward” to the release of the proposal, Palestinian Authority Mahmoud Abbas has promised to reject the so-called “deal of the century.”

    The Palestinians have been shunning the Trump administration since Trump recognized Jerusalem as Israel’s capital in December 2017 and moved its embassy to the city, saying the US could no longer be an honest broker in Israeli-Palestinian peace talks.”

    If only achieving peace is as easy as asking those Arab nations for millions of dollars to bail him out of his financial problems!

  3. Misterioso on February 26, 2019, 11:08 am

    More bull crap from the Zionist camp. I smell panic as “Israel’s” worldwide image continues to deteriorate and young Jews everywhere increasingly see it for the monster it is.

    “New US envoy on anti-Semitism: No distinction between anti-Zionism and anti-Semitism”

    Feb 22, 2019, Cleveland Jewish News, Feb. 22/19

    “Elan Carr, the United States’ new envoy to combat anti-Semitism, told American Jewish leaders in Jerusalem that he will work to end the ‘attempted distinction’ between anti-Semitism and anti-Zionism, while praising U.S. President Donald Trump’s efforts to combat the ‘scourge.’

    “’I will work to eradicate the attempted distinction between anti-Zionism and anti-Semitism. There is no distinction,’ he told U.S. Jewish leaders gathered at Jerusalem’s Inbal Hotel as part of the annual Conference of Presidents of Major American Jewish Organizations summit.

    “’There is a greater rise in new anti-Semitism that clothes itself as anti-Zionism. The anti-Semitism of the European street, of the college campus and of those that have embraced the notion that the Jewish people don’t have a right to their homeland,’ said Carr.

    “’Zionism wasn’t born in 1948 or with [Theodor] Herzl or with the First Zionist Congress. Zionism started with Parshat Lech-Lecha, with Moses and on the banks of the river of Babylon,’ he said. ‘Anyone who attempts to deny the Jewish religion its basic faith tenets, its rights to a homeland is wading into anti-Semitism. And I will fight it,’ he declared.

    “After a nearly two-year-long vacancy, Trump tapped Carr to fill the State Department’s Special Envoy to Monitor and Combat Anti-Semitism earlier this month.

    “Carr, 50, who is Jewish, is an Iraq-war veteran and grandson of Holocaust survivors. In an interview on Feb. 4, he told JNS, ‘I hope I make the difference. At the end of the day, all that matters are results and impact. And that’s what I pray—that I should have an impact on this terrible [problem].’

    “In his address to Jewish leaders on Thursday, Carr said Trump ‘could not be more passionate’ about fighting anti-Semitism.

    “’The President of United States spent considerable time in State of the Union speech to address anti-Semitism,’ said Carr.

    “Carr’s comments come amid a growing awareness and pushback against anti-Semitism in the West. On Tuesday, thousands of people took the streets in France to protest rising anti-Semitism there, with French President Emmanuel Macron pledging to adopt the International Holocaust Remembrance Alliance’s definition of anti-Semitism.

    “’There is a lot of good news, too. We have real allies in Europe and in some cases in the Muslim world who are passionate about this issue. They care about the future of the Jewish people,’ he said. ‘This will be a full-court press. We are not going to be ignoring any part of the world or any ideology.’

  4. Boomer on February 26, 2019, 12:22 pm

    re: “Is Israel’s tax grab a prelude to further hollowing out the PA?”

    I guess one could answer “yes,” but it seems that we are long past the prelude. Surely Israel and the U.S. have been working rather effectively toward that end for years. It seems that we are closer to the finale than to the beginning.

  5. Ossinev on February 26, 2019, 1:45 pm

    “More bull crap from the Zionist camp. I smell panic as “Israel’s” worldwide image continues to deteriorate and young Jews everywhere increasingly see it for the monster it is”

    Worth watching the following:

    On the one hand a smug overbearing totally brainwashed self righteous old Jewish Zionist and on the other a bright free thinking intelligent young Jew.
    Particularly illuminating from 9.30 minutes onwards when in response to the revelation by the young Guardian journalist that he himself is Jewish the dinosaur as if preprogrammed says “you are a self hating Jew” The young man keeps his composure and despite the torrent of abuse from the grotesque Bower manages to say that he found the accusation offensive.

    Have never come across this Bower creature before. He really is a shitty piece of work.

    • Bumblebye on February 26, 2019, 4:22 pm

      The young guy, Michael Segalov, does have flaws. At around the same time as this interview i read a piece by him wherein he stated that discussions of I/P should be led by Jews – which obviously silences the Palestinian voice.

  6. Jejasalo on February 26, 2019, 1:51 pm

    In effect, Hamas is gaining from the bizarre back and forth Frien-emyship of Netanyahu & Abbas.

    To be in perpetual conflict with an Islamist terror organization at the gates will serve Israel’s purpose for some time to come. Ozmat Yehudit’s ranks will grow, or Likkud will fully assimilate its ideology — the two (plus similar parties) will merge into the one they already are.

    Their buddies under Gantz & Lapid will spend their time sanctimoniously sniping at the “right” until they topple it and become essentially the same thing.

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