Israel to zero out Palestinian tax fund, leaving $6 billion unpaid

Israel plans to write off $6 billion in Palestinian tax funds to avoid payment

Palestinian Finance Minister Selame revealed that Israel intends to withhold the tax funds it has seized. He held the international community responsible for the financial crisis that has persisted for 15 months.

Scraper SystemJuly 29, 2026, 09:28 PM

Israel plans to write off $6 billion in Palestinian tax funds to avoid payment

Palestinian Finance Minister Selame announced that Israel had seized approximately $6 billion in Palestinian tax revenues and planned to write off these funds and avoid payment. At a press conference in Ramallah, Selame stated that the financial and economic relationship with Israel had reached an end.

The finance minister stressed that due to Israel's withholding of tax funds, the Palestinian government had been facing a deep financial crisis for 15 months. He disclosed that the government's monthly financial need was 1.5 billion shekels, but its expenditures did not exceed 850 million shekels.

Selame said that all the crises facing the Palestinian people aimed to eliminate the Palestinian presence and prevent the establishment of an independent state. Noting that he expected the crises to worsen due to the upcoming elections in Israel, the minister accused the international community of failing to provide adequate financial support to the Palestinian government.

Fuel Crisis Deepens

The Palestinian finance minister stated that one of the most critical problems facing the government was the fuel crisis. The problem, he noted, was not limited to fuel supply but also included the shekel cash flow and restrictions on fuel stations depositing their money in banks.

Selame said the government was trying to build a two-week fuel reserve for emergencies, but the fundamental solution was to increase the supply volume. He pointed out that fuel supply was subject to Israel's security procedures.

Electronic Payment Mandate

Regarding the cash accumulation crisis in banks, Selame explained that the solution was to gradually reduce dependence on the shekel and expand electronic payment methods. Describing the shift to electronic payments as a national security issue and a vital necessity, the minister noted that 33 percent of the money supply in circulation was in dollars and 55 percent in shekels.

Importance of Tax Funds

Under the Paris Economic Protocol signed between Palestine and Israel in 1994, Israel collects customs duties on goods entering Palestinian territories on behalf of the Palestinian Authority and transfers them monthly to the Palestinian Ministry of Finance. This source accounts for approximately 56 percent of Palestine's total public revenues.

The interruption or complete withholding of the funds directly affects the Palestinian government's ability to pay civil servant salaries, maintain public services, and meet its financial obligations to the private sector. Since 2019, Israel has been deducting from these funds, citing the Palestinian Authority's payment of stipends to families of prisoners and martyrs. However, Israel expanded this policy, plunging the Palestinian Authority into a deep financial crisis and causing the full payment of civil servants' salaries to be halted.

Israel plans to write off $6 billion in Palestinian tax funds to avoid payment