The Palestinian Ministry of Finance said today, Thursday, that it intends to disburse 50% of the salaries of Palestinian Authority employees in the civil and military sectors for the month of April early next week, amid its continuing financial crisis.
The ministry stated in a statement: “The date for disbursing public employees’ salaries for the month of April is Sunday, at a rate of 50% of the salary, with a minimum limit of two thousand shekels ($536).”
The ministry added, “The rest of the outstanding dues are a liability for the benefit of the employees, and will be disbursed when financial capabilities permit.”
Israel collects tax money on goods that pass through it to the Palestinian market in exchange for a 3% commission, given that it controls all the crossings that connect the West Bank to the outside world.
The past years have witnessed a delay or disruption in transferring these funds, which led to the inability of the Palestinian Authority to fulfill its financial obligations, whether to its employees or to suppliers from the private sector.
Data from the Ministry of Finance indicate that the debts accumulated by the Palestinian Authority exceeded $11 billion, whether to its employees or to local and foreign banks, the retirement fund, and its service providers in various sectors, which is close to twice its general budget.
Detained by Israel
During the past year, Israel decided to withhold the value of the money paid by the Palestinian Authority to families who lost their children in the Palestinian-Israeli conflict and to Palestinian detainees, and demanded that the Palestinian Authority not disburse money to them.
Israeli media reported – today, Thursday – that the Israeli security services raised warnings to the political level about the repercussions of the financial collapse of the Palestinian Authority.
It is noteworthy that Israeli Finance Minister Bezalel Smotrich announced last month his refusal to transfer tax revenues (clearance) to the Palestinian Authority, and demanded the approval of a sanctions package against it in response to Norway, Spain and Ireland’s recognition of the State of Palestine.
“I do not intend to transfer the clearance funds to the Palestinian Authority from now until further notice,” Smotrich said in a statement.
Smotrich announced that he asked Prime Minister Benjamin Netanyahu to approve a package of sanctions against the Palestinian Authority, in light of the new recognitions of the State of Palestine.
At the end of last May, the World Bank warned that the Palestinian Authority faces the risk of a “collapse in public finances” with “depletion of revenue flows” and a significant decline in economic activity, against the backdrop of the ongoing war on the Gaza Strip, since October 2023.
A bank report at the time stated that “the public financial situation of the Palestinian Authority has deteriorated severely over the past three months, which significantly increases the risk of a collapse in public finances.”
The bank noted in the report that “revenue flows have largely dried up due to the sharp decline in Israel’s transfers of clearance revenues payable to the Palestinian Authority, and the massive decline in economic activity.”
