The Palestinian Authority (PA) said Wednesday that it refused to receive tax revenues collected on its behalf by Israel for May.
“We reiterate that we rejected and reject receiving the tax revenues in implementation of the Palestinian leadership’s decision that terminates agreements and understandings with the Israeli government,” Hussein al-Sheikh, head of the PA’s Civil Affairs Authority, wrote on Twitter.
The tax revenues — known in Palestine and Israel as maqasa — are collected by the Israeli government on behalf of the PA on Palestinian imports and exports. Israel in return earns a commission of 3% of collected revenues.
The tax revenues are estimated at $200 million each month, where Israel deducts around $40 million for services on Palestinian exports and imports and the electricity bill.
These taxes represent 63% of the PA’s public revenue.
But even if the PA received the tax revenues in full, it would still suffer a severe decrease in revenues due to the lockdown of economic activities from the coronavirus pandemic over the past three months.
On May 20, Palestinian President Mahmoud Abbas announced the termination of all agreements and understandings signed with Israel and the US. The decision was in response to the proposed Israeli annexation plan for parts of the West Bank.
“The Israeli occupation authority, as of today, has to shoulder all responsibilities and obligations in front of the international community as an occupying power over the territory of the occupied state of Palestine, with all its consequences and repercussions based on international law and international humanitarian law,” he said.
Israel is expected to carry out the annexation on July 1, as agreed between Prime Minister Benjamin Netanyahu and Benny Gantz, the head of the Blue and White party.
The plan comes as part of US President Donald Trump’s so-called “Deal of the Century” that was announced on Jan. 28, which refers to Jerusalem as “Israel’s undivided capital” and recognizes Israeli sovereignty over large parts of the West Bank.