Report By: Nina Rai
Jerusalem, 02 Dec., 2012
Israel is set to withhold significant tax funds from the Palestinians in a clear case of retribution over their United Nations statehood recognition bid, which they won by an overwhelmingly majority at the world body’s General Assembly on Thursday.
The backlash feared by many nations over the Palestinians’ upgrade in diplomatic status to that of a UN non-member observer has already begun. Barely three days after the promotion, Israel said it will hold back some $120 million in taxes and other funds.
These funds are the revenues that the Jewish state amasses on behalf of the Palestinians, but it will now be withholding them to penalize Palestinians for their successful bid at UN to win de-facto statehood.
Meanwhile, on Sunday, the Israeli Cabinet passed a resolution declaring that it would not negotiate with Palestinians, based on the UN General Assembly's recognition of a Palestinian state in the West Bank, East Jerusalem and the Gaza Strip.
Speaking at the start of the weekly cabinet meeting, Israeli Finance Minister Yuval Steinitz said that taxes collected for the Palestinian Authority (PA), which were expected to be transferred later this month, would be withheld in response to the Palestinians’ unilateral UN move.
According to Steinitz, the Palestinians’ move was a “provocation and an attempt to advance their state without recognizing Israel.”
Further, he informed that the funds collected would now be used to offset the debt of more than $200 million owed by Palestinians to Israel’s Electric Corporation and other Israeli bodies.
This is the second act of retribution by Israel. On Friday, a day after the successful UN resolution, Israel announced it would go ahead with its plans to build 3,000 settler homes in the West Bank and East Jerusalem, a move that has been widely condemned by France, the UK and the US as damaging to the peace process.
With regard to the settlements approved by the government, Steinitz said: “It is high time that Jerusalem will be connected to Ma'ale Adumim. We told the US that if the Palestinians would go to the UN there would be repercussions.”
Opinion: The latest act of reprisal by Israel is not a knee-jerk reaction. In fact, just two weeks prior to the UN vote, Steinitz had threatened that Israel would not collect taxes on the Palestinians’ behalf, neither would they deliver the money to the Palestinian Authority nor help Ramallah in trade and industry matters, if the Palestinians went ahead with seeking an upgraded status at the UN.
So the retribution by Israel against Palestine is in line with what they had openly declared, and is clearly aimed at undermining the PA’s diplomatic victory at the UN. However, what is being showcased to the world at large is the pettiness, not the statesmanship, of the Jewish state. Most significantly, it shows that Tel Aviv does not have respect for the opinion of its own citizens nor that of the world.
A joint Israeli-Palestinian poll recently indicated that a strong majority of Israeli citizens—69 percent—said that their government should accept UN recognition of an independent Palestinian state. Besides, Israel is overlooking the fact that 138 out of the 193 member nations at UN voted in favor of the resolution. Only nine nations were with Israel, including the US, with the rest abstaining. This means an overwhelming 71.5 percent of the nations of the world voted in favor of the Palestinian resolution.
Disregarding world opinion will prove to be counterproductive and will only end up isolating Israel even further. By the latest two acts of vengeance, what they are doing is hurting the ordinary Palestinian on the street who is already reeling under so much hardship and suffering. Naturally the sympathies of the world too will tilt that side.
With regard to the Palestinian economy, although it has made strides in the past several years, it is still dependent on foreign aid and the tax revenue collected on its behalf by Israel. Withholding tax funds for this month will surely hit Ramallah, as they will be constrained to pay even worker salaries or provide other services.
At Israeli ports, custom duties are levied on goods bound for Palestinian markets. Tens of millions of dollars in custom duties levied on those goods in transit are then transferred every month to Palestinians. With a blockage on that money transfer by Israel, the Palestinian Authority will not have sufficient funds to pay the salaries of government workers.
It may be noted that the tax revenue collected by Israel comprises a large chunk of the Palestinian budget. These are governed by the 1994 Paris Protocols with the Palestinians.
This is not the first time that Israel has held back tax money. They have frozen payments to the PA before, particularly during times of diplomatic standoffs.
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