12/1/2025–|Last updated: 12/1/202509:59 PM (Mecca time)
Israeli Finance Minister Bezalel Smotrich said on Sunday that Israel plans to use the tax revenues it collects on behalf of the Palestinian Authority to pay its debts amounting to about two billion shekels ($544 million) to the state-owned Israeli Electricity Company.
Israel collects taxes on goods that pass through Israel into the occupied West Bank on behalf of the Palestinian Authority and remits the proceeds to Ramallah under a long-standing arrangement between the two sides.
Smotrich is withholding 800 million shekels allocated to the administration’s expenses in Gaza since Operation Al-Aqsa Flood and the start of Israel’s war on Gaza on October 7, 2023.
Loans and interest
Smotrich said at today’s cabinet meeting that the frozen funds are kept in Norway, and will instead be used to pay off debts owed to the Israeli Electricity Company, which amount to 1.9 billion shekels ($515.65 million).
He added: “We made this move after several anti-Israel measures, including Norway’s unilateral recognition of a Palestinian state.”
He added: “The Palestinian Authority’s debts to the Israeli Electricity Company led to a rise in loans and interest rates, as well as damage to the company’s credit rating, which was ultimately reflected on the citizens of Israel.”
The ultra-nationalist Smotrich opposes sending money to the Palestinian Authority, which uses the money to pay public sector wages, and accuses the Palestinian Authority of supporting the Al-Aqsa Flood Operation, and the Palestinian Authority currently pays 50-60% of salaries.
Israel deducts funds equivalent to the total amount of the so-called martyr payments paid by the Palestinian Authority to the families of martyrs who were killed or imprisoned by the Israeli authorities.
